Hiscox Group has now successfully secured the targeted $200 million of retrocessional North American peak peril reinsurance protection from its catastrophe bond transaction, with one tranche of notes priced at the mid of initial guidance, while the second priced at the low-end of reduced guidance, Artemis has learned.Just over one year ago, Hiscox secured $125 million in peak peril aggregate retrocessional reinsurance cover from an Ocelot Re Ltd.(Series 2023-1) cat bond issuance.seeking $200 million in retrocessional North American peak peril reinsurance protection from the capital markets.

the size of the issuance was unchanged, but the price guidance was narrowed and lowered towards the bottom-end of the range.Now, sources tell us that the Ocelot Re 2025-1 cat bond notes have been priced and Hiscox has secured its second Ocelot Re cat bond, with one tranche of notes priced within its initial spread guidance, while the second has been priced at the low-end of its reduced guidance.There has still been no change to the size of this catastrophe bond for Hiscox, with the notes set to provide the company with a $200 million multi-year source of US and Canada named storm and earthquake retrocessional reinsurance.

One tranche of this Ocelot Re 2025-1 cat bond will be structured to provide annual aggregate and weighted PCS industry-loss trigger based coverage, while the second will provide industry-loss index trigger second and subsequent event occurrence protection.The $150 million tranche of Class A notes will provide the annual aggregate protection and have an initial attachment probability of 1.73%, an initial expected loss of 1.35% and were first offered to investors with price guidance for a spread of between 4.25% and 4.75%, which was then lowered to a tighter range of 4.25% to 4.5%.Now, sources have told Artemis that the notes have been priced to pay cat bond investors a spread of 4.5%, so the middle of the initial spread guidance.

The $50 million tranche of Class B notes will provide second and subsequent event occurrence based protection and have an initial attachment probability of 2.55%, an initial expected loss of 1.89%, and were first being offered to investors with price guidance for a spread of between 6.5% and 7.25%, which was then reduced to a tighter range of 6.25% to 6.5%.Sources have now told us that the notes have been priced to pay cat bond investors a spread of 6.25%, so the bottom-end of the reduced guidance range.Hiscox has benefited from investor demand and strong execution for its first catastrophe bond in the Ocelot Re series of deals, with the market still executing keenly on price to provide significant value to sponsors, although demonstrating with the Class A notes that not every offering is going to price below initial guidance as risk-returns must still be deemed adequate.

As a reminder, you can read all about this catastrophe bond from Hiscox and every other cat bond issuance 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.