Liberty Mutual Insurance is back in the catastrophe bond market aiming to secure at least $125 million of indemnity based, multi-peril catastrophe reinsurance protection from the capital markets through a issuance, Artemis has learned.The US and international primary insurance and reinsurance group is seeking to sponsor what will be the eleventh catastrophe bond in its long-standing Mystic Re series.In recent years, Liberty Mutual has sponsored one cat bond in December, layering capital markets backed catastrophe reinsurance within its tower while also staggering the multi-year coverages maturities at the same time., where you can filter the results by trigger type and other features.

For this cat bond that will be issued in 2025, but will come on-risk from 2026, Liberty Mutual is once again utilising its Bermuda-based special purpose insurer (SPI) Mystic Re IV Ltd.Three tranches of Series 2026-1 notes are being offered to cat bond investors, with the issuance designed to provide Liberty Mutual at least $125 million in multi-peril, multi-year collateralized reinsurance protection on a per-occurrence basis.The notes will provide reinsurance protection to Liberty Mutual and its affiliates across a three calendar year term, from January 1st 2026 to the end of 2028, we are told.

The Mystic Re IV 2026-1 cat bond notes will provide Liberty Mutual with reinsurance protection against losses from named storms, earthquakes, severe weather and wildfires on an indemnity trigger and per-occurrence basis from all three tranches, with the covered area being the US, Canada and the Caribbean.A currently $40 million tranche of Class A notes will attach their coverage at $3 billion of losses and exhausting at $3.75 billion, which gives them an initial attachment probability of 1.79%, an initial expected loss of 1.42%, and we’re told these notes are offered with spread price guidance in a range from 3.25% to 3.75%.A currently $60 million Class B tranche will attach lower down at $1.5 billion of losses and exhausting at $3 billion, which gives them an initial attachment probability of 7.17%, an initial expected loss of 3.62%, and we’re told these notes are offered with spread price guidance in a range from 6.75% to 7.25%.

The final currently $25 million Class C tranche will attach their coverage lower down still at $1 billion of losses and exhaust at $1.5 billion, which gives them an initial attachment probability of 16.86%, an initial expected loss of 11.19%.However, we’re told these notes are not currently offered with any price guidance, so it’s likely feedback is being sought from investors first.The Class C tranche are one of the riskiest ever to come from the Mystic Re program, we understand.

While the price guidance for the other two tranches is lower than comparable recent issuances, reflecting the tighter spread environment in the catastrophe bond market.The $150 million cat bond is scheduled to mature in early January, so there’s a good chance Liberty Mutual more than replaces it, given the large layers these new classes of notes span provide plenty of opportunity for upsizing if investor appetite proves sufficient.You can read all about this catastrophe bond from Liberty Mutual and every other cat bond issued in the Artemis Deal Directory..

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