Florida’s Citizens Property Insurance Corporation has now upsized its target for its latest catastrophe bond, increasing it to now seek up to $1.4 billion in named storm reinsurance protection from the Everglades Re II Ltd. (Series 2025-1) issuance, which if secured, would make it the joint second largest cat bond ever, Artemis has learned.
Only five catastrophe bonds have ever surpassed the billion dollar mark, but this Everglades Re II 2025-1 issuance is on track to become the sixth, with its target size now raised to up to $1.4 billion, amid the cat bond market seeing strong deal execution throughout 2025 so far.
Readers may recall that Florida’s Citizens Property Insurance Corporation previously sponsored the largest catastrophe bond ever issued, the $1.5 billion Everglades Re Ltd. (Series 2014-1) issuance.
Additionally, in 2024, the Texas Windstorm Insurance Association (TWIA) sponsored the second largest cat bond ever issued, the $1.4 billion Alamo Re Ltd. (Series 2024-1) deal.
As mentioned, if Florida Citizens manages to secure its upsized target for this Everglades Re II 2025-1 deal, it would become the joint second largest catastrophe bond ever issued.
This will be the sixteenth series of cat bond notes sponsored by Florida Citizens and the fourteenth to take the Everglades Re name, since its first sponsorship of a catastrophe bond back in 2012.
As a reminder, you can read about every one of Florida Citizens catastrophe bonds in our extensive Deal Directory.
A year ago, Florida Citizens had been seeking to sponsor another very large deal, eventually settling for $1.1 billion of reinsurance from the Everglades Re II Ltd. (Series 2024-1) cat bond at a time when the market had just about exhausted its capacity due to a very busy pipeline of deals.
Florida Citizens returned to the catastrophe bond market earlier this month, initially seeking $975 million in named storm reinsurance protection
Bermuda based special purpose insurer (SPI) Everglades Re II Ltd. is aiming to issue four tranches of Series 2025-1 notes, each to collateralize a three-year source of reinsurance for Florida Citizens.
As we previously reported, all four tranches of notes being offered to catastrophe bond funds and investors will provide the Floridian property insurer of last resort with multi-year annual aggregate named storm reinsurance for the state of Florida, on an indemnity trigger basis.
The Class A tranche of notes that Everglades Re II is offering were originally $275 million in size, but are now being pitched at an upsized range of $400 million – $450 million, we are told. The notes come with an initial attachment probability of 1.72%, an initial base expected loss of 1.56% and they were first being offered to investors with spread price guidance in a range from 8.75% to 9.5%. But, we’re now told that price guidance has fallen towards the low-end of that range, at 8.75%.
The tranche of Class B notes has increased from $275 million to between $350 million – $400 million. The notes come with an initial attachment probability of 2.07%, an initial base expected loss of 1.90% and they were first being offered to investors with spread price guidance in a range from 9.75% to 10.5%. We are now told that the price guidance has fallen towards the low-end of that range, at 9.75%.
The Class C tranche of notes that Everglades Re II is offering were also originally $275 million in size, but are now being pitched at an upsized range of $300 million – $350 million. The notes have an initial attachment probability of 2.60%, an initial base expected loss of 2.32% and they were being offered to investors with spread price guidance in a range from 11% to 11.75%, but we have now been told that they are being pitched towards the lower-end at 11.25%.
The final Class D tranche of notes were originally being offered at $150 million, but are now being pitched at an upsized range of $150 million – $200 million. The notes comes with an initial attachment probability of 3.02%, an initial base expected loss of 2.80% and they were first being offered to investors with spread price guidance in a range from 12.5% to 13.5%. That price guidance has now shifted towards the mid-point of that range, at 13%.
It will be interesting to see how large this new catastrophe bond for Florida Citizens can get.
Remember that, Citizens already has $1.6 billion of catastrophe bonds outstanding to provide some of its reinsurance protection for the coming hurricane season.
Should this new cat bond deal achieve the upper-target now set, that would take Florida Citizens cat bond backed reinsurance protection to $3 billion, which we believe would be the highest level ever.
You can read all about this new Everglades Re II Ltd. (Series 2025-1) catastrophe bond being sponsored by Florida’s Citizens Property Insurance Corporation and view details of more than 1,000 other cat bond issuances in the extensive Artemis Deal Directory.
