The Hartford narrows price guidance for $200m Foundation Re IV cat bond

US primary property and casualty insurer The Hartford is targeting tighter pricing for its new catastrophe bond issuance, which is its first since 2011, while still aiming for $200 million of multi-peril catastrophe reinsurance from the Foundation Re IV Ltd. (Series 2023-1) cat bond issuance.

The Hartford, through its Hartford Fire Insurance entity, had previously sponsored a string of Foundation Re cat bond deals from 2004 up to the last which we covered back in 2011.

The insurer returned to the catastrophe bond market in search of fully-collateralized peak peril catastrophe reinsurance protection on a multi-year basis, earlier this month.

The Hartford is targeting $200 million of collateralized US named storm and earthquake reinsurance protection, across a three calendar year term running the the end of 2026, on an indemnity trigger and per-occurrence basis with this Foundation Re IV 2023-1 cat bond.

This target remains unchanged at this stage, we’re told, but the insurer is seeking tighter pricing.

The still $200 million of Series 2023-1 Class A notes being issued by Foundation Re IV Ltd. have an initial expected loss of 1.36% and were at first offered to cat bond investors with spread price guidance in a range from 6% to 6.75%.

We’re now told that this spread guidance has been narrowed, with a range of 6.25% to 6.5% being offered to investors.

Which suggests pricing well within the initial guidance range, while The Hartford looks on track to secure the targeted reinsurance it had been seeking from the capital markets with its first catastrophe bond since 2011.

You can read all about this new Foundation Re IV Ltd. (Series 2023-1) cat bond transaction in our Deal Directory, where you can analyse details of almost every catastrophe bond ever issued.