Prologis gets new $95m Logistics Re cat bond at low-end of twice reduced price guidance

Prologis, Inc., the logistics, warehousing and supply-chain focused real estate owner and investor, has now secured the targeted $95 million of earthquake insurance protection from its new Logistics Re Ltd. (Series 2024-1) US quake catastrophe bond issuance, while the spread was finalised at the low-end of twice reduced guidance, Artemis can report.

We were first to report back at the end of September that Prologis, Inc. was back and looking to secure its second catastrophe bond issuance, which would renew the coverage provided by its soon to mature first deal.

Prologis had previously secured $95 million of multi-year, earthquake focused property catastrophe insurance protection through the successful issuance of a Logistics Re Ltd. (Series 2021-1) cat bond in the fourth-quarter of 2021, which is now scheduled to mature in December of this year.

The company returned to sponsor issuance of $95 million of Series 2024-1 Class A notes through Logistics Re Ltd.

The notes were designed to provide Prologis with a just over three-year source of US earthquake insurance protection on an indemnity and per-occurrence basis, with maturity slated for mid-December 2027.

There has been no change to the size of this issuance and now priced the $95 million of protection has been secured for Prologis.

The one thing that did change, while this deal was being marketed, was the spread to be paid to investors.

Initially, the Logistics Re 2024-1 catastrophe bond notes were offered with price guidance of between 6.75% and 7.25%.

As we later reported, the price guidance was then lowered, with a new range of 6.25% to 6.75% being offered.

In a further update, we reported that the price guidance fell even further, with a range of 6% to 6.25% offered to investors.

As a reminder, the Logistics Re Series 2024-1 Class A notes come with an initial attachment probability of 3.1% and an initial expected loss of 2.6%.

We’re now told that the $95 million of notes have been priced, with their spread finalised at 6%, so the low-end of twice reduced price guidance.

Indicating strong execution for this second catastrophe bond for sponsor Prologis, with the notes eventually pricing a full 75 bps below the bottom-end of initial guidance.

The pricing likely reflects the attractiveness of diversifying cat bond investment opportunities at this time, with a glut of US wind exposed bonds having come to market through most of the year to-date and a lack of diversifiers such as earthquake risks.

Showing other potential cat bond sponsors that there could be an opportunity to secure well-priced reinsurance and retrocession for diversifying perils in the catastrophe bond market at this time.

You can read all about the Logistics Re Ltd. (Series 2024-1) catastrophe bond and every other cat bond issuance in our extensive Artemis Deal Directory.