Heritage secures new $100m Citrus Re named storm catastrophe bond – Artemis.bm

Heritage Insurance Holdings, Inc., the nationally expansive and Florida headquartered property and casualty insurer, has now secured its target for $100 million in collateralized US named storm reinsurance from a new Citrus Re Ltd. (Series 2024-1) catastrophe bond issuance.

Heritage returned to the catastrophe bond market back in February with a $100 million target for what will be the ninth issuance under the Citrus name that Heritage has sponsored and we have listed in our extensive cat bond Deal Directory.

The goal was to secure $100 million of reinsurance from the capital markets for its own book under cedent Heritage Property & Casualty Insurance Company, as well as that of subsidiary Narragansett Bay Insurance Company (NBIC).

The Citrus Re Series 2024-1 cat bond notes are designed to provide Heritage and its subsidiary with a multi-year source of southeast US named storm reinsurance protection, initially for the US states of Alabama, Florida, Georgia, Mississippi, North Carolina and South Carolina, on an indemnity trigger and per-occurrence basis, across a three-year term from June 1st 2024 to June 2027.

We’re now told that the notes have been priced and that Heritage has secured the initial target of $100 million in collateralized reinsurance from its ninth Citrus Re cat bond deal.

As we reported in our first update on this new cat bond for Heritage, the price guidance was updated at levels within the initial guidance, which we deem a positive sign for the market not reducing spreads on every single offering in the marketplace.

The now confirmed as $50 million tranche of Class A notes come with an initial expected loss of 1.29% and were first offered to investors with spread guidance in a range from 9% to 9.75%. As we reported, that guidance was updated to 9.25%, so towards the lower-end of initial guidance, which is now where the notes have been priced.

The also now confirmed as $50 million Class B tranche of notes are riskier, having an initial expected loss of 1.5% and these notes were initially offered to investors with spread guidance in a range from 10% to 10.75%. As we reported, the Class B notes guidance was updated to 10.5%, so within the upper-half of the initially marketed range, which is where these notes have now been priced as well.

Which is positive for the market, in showing that not every deal will price down or below initial guidance and that investor discipline remains, albeit with spreads definitely lower than they were a few months ago now.

You can read all about this Citrus Re Ltd. (Series 2024-1)  catastrophe bond and every other cat bond issued in our extensive Artemis Deal Directory.

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