Large European reinsurer Hannover Re has secured the 50% upsized target for $150 million in retrocession covering US and North American peak perils from its new 3264 Re Ltd. (Series 2025-2) catastrophe bond, with the notes priced at the bottom of reduced guidance.
Hannover Re returned to the catastrophe bond market at the beginning of the month, with an initial target 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.
As we then reported in our first update, the price guidance for this issuance had been lowered as Hannover Re targeted strong price execution for its latest cat bond deal.
In a second update, we learnt that the target size for this cat bond issuance had increased by 50% to $150 million.
Now, we’re told the upsized target of $150 million was achieved, with the 3264 Re 2025-2 cat bond notes eventually priced at the bottom of reduced guidance.
This new deal becomes 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.
The now confirmed to be $150 million of Series 2025-2 Class A notes that 3264 Re Ltd. will issue, are set 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.
The notes come with an initial base expected loss of 3.68%, and were initially offered to cat bond investors with price guidance in a range from 8.25% to 9%, which later fell to an updated range of 7.5% and 8.25%.
The notes then fell towards the low-end of that updated range, which is where we’ve been told that the pricing has been finalised for a spread of 7.5%, so below the initial range and representing a roughly 13% decline in the spread from the mid-point of the initially offered range.
Hannover Re has benefited from the strong price execution in the catastrophe bond market to secure a meaningful $150 million of US and North American peak peril retrocession at attractive pricing, while locking that in for a multi-year period, all thanks to the appetite of cat bond investors.
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 extensive Artemis Deal Directory.
