QBE gets $250m Bridge Street Re cat bond priced 14% below initial mid-point

QBE, the Australia headquartered global insurance and reinsurance group, has now secured its targeted $250 million of retrocessional protection from its first catastrophe bond sponsorship since 2013, as the Bridge Street Re Ltd. (Series 2025-1) issuance has now been priced roughly 14% below the mid-point of initial guidance, we are told.

QBE has been back in the catastrophe bond market since earlier this month, which we first reported on December 12th, targeting $250 million or more in retrocession from this Bridge Street Re 2025-1 cat bond deal.

It is destined to be QBE’s first cat bond sponsorship since late 2013, when it had secured $250 million of US and Australian multi-peril protection from the VenTerra Re Ltd. (Series 2013-1) deal.

The target remained for Bridge Street Re to issue $250 million of Series 2025-1 Class A notes to provide QBE with a multi-year source of retro reinsurance protection, on an industry-loss trigger and annual aggregate basis.

But, we were then told that the price guidance for the risk interest spread the notes will pay to investors had been reduced to a new range of between 4% and 4.25%.

Now, we’ve learned that the notes have priced at the bottom-end of that reduced guidance for QBE.

As a result, the Bridge Street Re 2025-1 catastrophe bond will provide QBE with $250 million of retro coverage, to run across a roughly three-year term, from issuance to the end of 2027, protecting the company against major named storm and earthquake industry loss events throughout the United States, Puerto Rico, DC, the US Virgin Islands and Canada on an aggregate basis.

The $250 million of Class A notes Bridge Street Re Ltd. is set to issue come with an initial expected loss of 1.29%. They were first offered to cat bond investors with price guidance in a range from 4.25% to 5%, but then as we reported the price guidance for the risk interest spread the notes will pay was reduced to between 4% and 4.25%.

Now, we understand the $250 million of Series 2025-1 Class A notes have priced to pay investors 4%, so the bottom-end of reduced guidance and a roughly 14% decline in price from the initial mid-point.

QBE has benefited from investor demand and strong execution for its first catastrophe bond since 2013, resulting in another positive result for a sponsor securing well-priced multi-year aggregate retrocession from the capital market.

You can read all about this new Bridge Street Re Ltd. (Series 2025-1) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.