Beazley sponsors further $160m cyber cat bond via PoleStar Re, takes total to $300m – Artemis.bm


Beazley has successfully sponsored a second 144A cyber catastrophe bond, securing a further $160 million in cyber reinsurance from a PoleStar Re Ltd. (Series 2024-2) issuance, which takes its total cyber cat bond cover to $300 million, Artemis has learned.

We understand this second PoleStar Re cyber catastrophe bond issuance is being seen as an extension of the first $140 million PoleStar Re 2024-1 that was sponsored by Beazley last December.

That first PoleStar Re 2024-1 cyber cat bond provides Beazley with reinsurance through to the end of calendar year 2025, but we understand this second $160 million take-down has a longer tenure, providing a source of cyber loss protection through to the end of 2026.

We understand from sources that the structure is the same and this new cyber cat bond could perhaps simply fill out the $300 million layer that the first PoleStar Re deal partially filled.

That PoleStar Re 2024-1 cyber cat bond has an attachment point at $500 million of losses and exhausts its coverage at $800 million, so it is possible this new $160 million issuance, which we’re terming a Series 2024-2 deal (although that is not yet confirmed to us) may just expand the coverage to the full layer.

We’re told that very strong investor demand for the initial notes attracted Beazley to extend the PoleStar Re cyber cat bond cover and this is evidenced in the way the issuance has eclipsed the first, providing the full-layer of reinsurance coverage (if it does, as assumed, occupy the same layer of the tower).

As with the first, we assume this new Pole Star Re issuance will provide Beazley a $160 million source of broad cyber reinsurance coverage from the capital markets, protecting it against major cyber loss events that impact its underwriting entities, including the syndicates at Lloyd’s and its US insurers.

The same Bermuda domiciled special purpose insurer PoleStar Re Ltd. has been used for this second 144A cyber cat bond from Beazley.

We understand the notes are again structured on an indemnity trigger and per-occurrence basis, but this time will run across a longer term through the rest of 2024, and all of calendar year’s 2025 and 2026.

Sources said that broker Gallagher Securities is again the sole structuring agent and bookrunner for Beazley’s second 144A cyber cat bond. We also suspect the risk modeller will be the same, which was RMS for the first PoleStar cyber cat bond.

We are told the notes are expected to pay investors a spread of 13.25%, which is slightly higher than the 13% of the first PoleStar Re cat bond.

Now, with this second issuance Beazley is the sponsor of $300 million of 144A cyber catastrophe bond notes, across the two take-downs from PoleStar Re Ltd.

This transaction takes the total amount of cyber risk in the 144A catastrophe bond market to $588.75 million, with Beazley now contributing more than half of that sum.

You can read all about this PoleStar Re Ltd. (Series 2024-2)  catastrophe bond transaction to our Deal Directory, where you can analyse details of almost every cat bond ever issued and filter the list by peril to show only cyber cat bonds.

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