Large European reinsurer Hannover Re has now upsized its target for its latest catastrophe bond, increasing it to now seek $150 million in retrocession covering US and North American peak perils from the 3264 Re Ltd. (Series 2025-2) issuance, Artemis has learned.
Hannover Re returned to the catastrophe bond market at the beginning of the month, initially looking to secure $100 million or more in US and North American peak peril retrocession on an industry-loss trigger basis from this 3264 Re 2025-2 deal.
In our first update on this deal, we reported that the price guidance for this issuance had been lowered as Hannover Re targeted strong price execution for its latest cat bond deal.
Now we’ve learned that with reduced pricing targeted, the reinsurance firm has also opted to upsize the amount of retrocession this deal will provide.
This will become the fifth catastrophe bond in the 3264 Re series for Hannover Re, as the company continues to tap the capital markets for its retrocession needs.
You can read about all of Hannover Re’s cat bonds by filtering our Deal Directory by sponsor.
Initially, 3264 Re Ltd. was offering a $100 million single tranche of Class A Series 2025-2 notes to catastrophe bond investors, designed to provide Hannover Re with both multi-year per-occurrence coverage for northeast US named storms and also annual aggregate retrocessional reinsurance for North American earthquakes.
Now, we’re told the target size has increased, with Hannover Re said to be targeting $150 million of protection from this 3264 Re Series 2025-2 issuance.
The now $150 million in Series 2025-2 Class A notes that are being offered by 3264 Re Ltd. come with an initial base expected loss of 3.68%.
The notes were initially offered to cat bond investors with price guidance in a range from 8.25% to 9%, which at the first update was lowered to between 7.5% and 8.25%.
Now, we’re told that the price guidance has fallen towards the low-end of that range, so 7.5%.
With the upsized issuance, and pricing now moving to the bottom end of guidance, the 3264 Re 2025-2 cat bond appears to be attracting strong investor demand, positioning Hannover Re to potentially obtain more coverage at tighter spreads than initially targeted.
As a reminder, you can read all about this new 3264 Re Ltd. (Series 2025-2) catastrophe bond from Hannover Re and every other cat bond issued in the Artemis Deal Directory.
