Military mutual insurer USAA has now secured the upsized target for $425 million of multi-peril aggregate reinsurance protection from its latest catastrophe, with the new deal now priced within the initial guidance.USAA ventured back to the catastrophe bond market in early April, with an initial target to secure $400 million of annual aggregate reinsurance protection from this Residential Re 2025-1 issuance.As we then wrote in an update on this deal, USAA lifted the target size for the issuance slightly to $425 million, while price guidance was updated at different levels within the initially marketed ranges for the spreads of each of the three tranches of notes.Now, we’re told that USAA has successfully priced the deal within the initial guidance, while securing the upsized $425 million of fully-collateralized aggregate catastrophe reinsurance from it.

USAA remains the most consistent sponsor of catastrophe bonds, augmenting and diversifying its sources of catastrophe reinsurance protection using the capital markets and securitization since 1997.This new Residential Re 2025-1 cat bond is the 45th transaction we have tracked from USAA, .Now priced, this Residential Re Series 2025-1 catastrophe bond will provide USAA with a $425 million source of annual aggregate and indemnity based reinsurance protection against losses from the usual perils that feature in its catastrophe bond deals, being U.S.

tropical cyclones, earthquakes (plus fire following), severe thunderstorm, winter storm, wildfire, volcanic eruption, meteorite impact, other perils (all including auto & renter policy flood losses), across a roughly four year term.The Class 13 tranche of notes are the riskiest layer and will provide $50 million in reinsurance.They have an initial base expected loss of 2.25% and were first offered with price guidance of 12% to 13%, but pricing was eventually finalised to pay investors a spread of 13%.

The Class 14 tranche of notes will provide $150 million of reinsurance.They have an initial base expected loss of 0.99%, and were first offered to investors with spread price guidance in a range from 7.5% to 8%, but have now been priced at the mid-point of that range, to pay a spread of 7.75%.The final $200 million Class 15 tranche of notes were successfully upsized to provide USAA $225 million of reinsurance.

They have an initial base expected loss of 0.61% and were first offered to cat bond investors with price guidance of 5.5% to 6% and have now also been priced at the mid-point for a spread of 5.75%.As a result, all three tranches priced within the initial guidance that was offered, with the riskiest layer of aggregate notes pricing at the top-end, the other two at the middle of the marketed price range.The now 44 deal strong Residential Re catastrophe bond program is the most prolific program in the marketplace and USAA is the most prolific cat bond sponsor, having been a regular and consistent feature of this market since the cat bond instrument was first developed.

You can read all about this new catastrophe bond from USAA and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.