February 23, 2024

We understand that the Massachusetts Property Insurance Underwriters Association (MPIUA) has now increased the maximum target for its new Mayflower Re Ltd. (2023-1 series) catastrophe bonds to $250 million.

massachusetts mpiua logoAt the same time, pricing has also been understood to have been updated, with one part now looking likely to be priced at the midpoint of the original guidance range and another part slightly riskier, slightly above the original guidance range.

The Mayflower Re 2023-1 catastrophe bond is the first issued by Massachusetts MPIUA since 2017, bringing the total number of bonds we track for the Massachusetts Residual Market Property and Casualty Insurance Association (FAIR Plan) to four MPIUA catastrophe bonds since 2017. Transactions since 2010.

The Mayflower Re 2023-1 catastrophe bond will provide MPIUA with indemnity source-based annual aggregate storm, severe thunderstorm and winter storm reinsurance protection for a three-year term ending in June 2026, assisted by global reinsurer Hannover Re This is achieved by opening up capital markets for insurance associations.

The Class A Notes originally had a size of $75 million, but we are told that the size is now larger at $100 million.

The Class A Notes have an initial base expected loss of 1.084%, and were initially marketed to investors with a spread guidance of 4.25% to 4.75%, but we are now informed that this guidance has been updated and fixed at 4.5%.

Meanwhile, the Class B Notes had an initial offering size of $100 million, but now we’re told the offering size is $150 million.

The slightly riskier Class B notes had an initial base expected loss of 1.598%, and were initially marketed to investors with a spread guidance of 5% to 5.5%, but we are now told that this has been fixed above that range as interest rates A difference of 5.75%.

We’re told these are likely to be the finalized sizes and spreads of the two tranches, but pricing won’t be confirmed until later today, so we’ll keep you posted if there are any other changes.

You can read all about this new Mayflower Re Ltd. (Series 2023-1) cat bond and all other cat bond deals issued since the market launched in the Artemis Deals Directory.

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