The Texas Windstorm Insurance Association (TWIA), the residual market property insurer for the State of Texas, is back in the catastrophe bond market with a target to secure at least $375 million of capital markets backed reinsurance from a issuance, Artemis can report.This will be the eleventh catastrophe bond sponsored by the Texas Windstorm Insurance Association (TWIA) that we have analysed and listed in our extensive Deal Directory.You can .TWIA returns to the cat bond market in a year when .

Of its outstanding cat bonds, TWIA will have $1.9 billion of cat bond coverage available for this wind season already.TWIA also has some multi-year reinsurance in-force, so it actually requires $1.727 billion in new reinsurance or cat bonds this year.So, with this initial $375 million target for its first Bluebonnet Re deal, TWIA looks set to have at least $2.275 billion of cat bond supported coverage available this year.

As a result and should investor demand allow this deal to upsize, it would further reduce the amount of traditional reinsurance that TWIA will need to buy.For this Series 2025-1 cat bond issuance, the Texas Windstorm Insurance Association (TWIA) is using a new Bermuda based issuing structure named Bluebonnet Re Ltd., we are told.Bluebonnet Re Ltd.

will issue three tranches of Series 2025-1 notes that will be sold to investors and the proceeds be used to support the collateral needs of the reinsurance agreements to protect TWIA.Like other TWIA-sponsored catastrophe bonds, global reinsurance firm Hannover Re is set to act as the ceding reinsurer to front the capital markets through a retrocession arrangement, we understand, while TWIA will be the reinsured party.At least $375 million in reinsurance protection is being sought across the three tranches of Series 2025-1 notes that Bluebonnet Re will issue.

All three tranches will provide TWIA with reinsurance against Texas named storms and severe thunderstorms, on an indemnity trigger and annual aggregate basis, the same as its previous cat bonds under the Alamo Re  vehicle have provided the insurer.The reinsurance protection will run across three annual aggregate risk periods, running to maturity in June 2028, while we understand there is an aggregate event deductible in force for loss events to qualify.A $150 million Class A tranche of notes would cover TWIA for losses from an attachment of $4.8 billion to $6.2 billion, giving the notes an initial attachment probability of 2.19% and an initial expected loss of 1.84%.

These notes are being offered with spread price guidance of 6.5% to 7.25%, sources said.An also $150 million Class B tranche of notes will cover TWIA for losses from an attachment of $3 billion to $3.8 billion, giving the notes an initial attachment probability of 3.67% and an initial expected loss of 3.18%.These notes are being offered with spread price guidance of 9% to 10%, we’re told.

The final $75 million Class C tranche of notes will cover TWIA for losses from an attachment of $2 billion to $3 billion, giving the notes an initial attachment probability of 5.5% and an initial expected loss of 4.5%, so are the riskiest and lowest down layer.These notes are being offered with spread price guidance of 11% to 12%, we understand.The $375 million initial target for this Bluebonnet Re 2025-1 cat bond for TWIA is perhaps smaller than had been anticipated, given its significant reinsurance needs.

But we suspect TWIA is trying to keep some balance between the catastrophe bond and traditional reinsurance portions of its tower, while locking in multi-year cat bond coverage where it makes most sense to do so.That said, there is every chance this deal upsizes, as that has been the trend so far in 2025 given strong execution in the market.It’s worth noting that Bluebonnet Re Ltd.

is also being used by the Texas Fair Plan Association (TFPA) at the same time for its debut catastrophe bond under a different series number.You can read about the issuance for the Texas FAIR Plan already in our Deal Directory.In case you weren’t aware, TWIA managed the Texas FAIR Plan so the strategy to issue a first cat bond for the FAIR Plan no doubt comes from its Board and staff.

We’ve elected to list the two Bluebonnet Re cat bond series separately in the Deal Directory, given the different ceding beneficiaries behind them.TWIA has been directly and remains one of the largest sponsors in our cat bond market sponsor leaderboard.Read all about this new catastrophe bond for the Texas Windstorm Insurance Association and every other cat bond transaction in the Artemis Deal Directory..

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