Kin secures 50% upsized $300m Hestia Re 2025-1, its largest cat bond yet
Artemis has learned that direct-to-consumer insurtech company, Kin Insurance, has now successfully priced its latest catastrophe bond transaction, securing the 50% upsized target of $300 million of Florida named storm reinsurance protection from the Hestia Re Ltd. (Series 2025-1) issuance, which marks the company’s largest cat bond yet.
At the same time, we’re told the final pricing of the two tranches of Series 2025-1 notes were at the low-end of the already reduced guidance range.
Kin sponsored its debut $175 million Hestia Re Ltd. (Series 2022-1) catastrophe bond cover back in April 2022.
The company then returned to the cat bond market with a $100 million Hestia Re Ltd. (Series 2023-1) issuance in March 2023.
Kin then ventured back to the catastrophe bond market in early February, looking to secure $200 million or more in Florida named storm protection from this Hestia Re 2025-1 deal.
As we reported in our first update on this new deal, the target size was increased to as much as $300 million, while at the same time the price guidance range was lowered for both tranches of cat bond notes.
Now, sources have told us that the upsized target of $300 million has been secured, with the notes priced at the bottom of reduced guidance.
As a result, Hestia Re Ltd., Kin’s Bermuda-based special purpose insurer (SPI), will issue $300 million in two tranches of Series 2025-1 notes.
These notes will provide the sponsor with a three hurricane season source of fully-collateralized Florida named storm reinsurance, on a indemnity trigger and per-occurrence basis, running from June 1st this year to three years after the issuance completes.
The Class A tranche of notes of Series 2025-1 notes, which were originally $100 million in size, were then lifted to a targeted $175 million to $200 million in size, has now been priced at $200 million, so the top end of its upsized guidance.
The Hestia Re 2025-1 Class A notes have an initial base expected loss of 1.51% and were first offered to cat bond investors with price guidance in a range from 7.25% to 8%.
That priced guidance was updated at a lower level, with a spread of between 6.75% to 7.25% then being offered to investors, and we’re told the pricing has now been finalised at the low-end of the spread at 6.75%.
The riskier Class B tranche have been priced at $100 million in size, which is the same price they were originally being offered to investors.
The Hestia Re 2025-1 Class B notes have an initial base expected loss of 2.03% and were first offered to cat bond investors with price guidance in a range from 8.25% to 9%.
In our last update on this deal, we revealed that the priced guidance had also fallen and had been fixed at the low-end of 8.25%.
This is a strong result for Kin, as this latest cat bond builds on the company’s previous success across the market. Kin has maximised its opportunity to increase its reinsurance protection from the capital markets with this Hestia Re 2025-1 deal, capitalising on the strong demand being seen from the cat bond investor base, while also securing the coverage at attractive pricing.
As a reminder, you can read all about this Hestia Re Ltd. (Series 2025-1) in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued.
