Core Specialty Insurance Holdings, Inc.is back in the catastrophe bond market targeting $75 million of US peak peril reinsurance protection from a cat bond, which like its first will cover its StarStone US entities to begin.The firm’s first $65 million Yosemite Re Ltd.(Series 2022-1) catastrophe bond was a rare excess and surplus (E&S) focused transaction, initially designed to protect Core Specialty-owned insurers under the StarStone brand, but with the company able to add other brand-name insurers to the deal’s reinsurance protection at future resets if it chose to.

The same is true for Core Specialty’s second catastrophe bond, with protection targeted for the StarStone entities StarStone National Insurance and StarStone Specialty Insurance to begin.So again, this seems to be a cat bond designed to protect a book of excess and surplus (E&S) focused insurance.Yosemite Re Ltd., the Bermuda based special purpose insurer (SPI), is again the issuance vehicle and it is targeting issuance of a single $75 million tranche of Class A notes with this deal, we have learned.

The notes will provide the StarStone companies (initially) with a multi-year source of collateralized catastrophe reinsurance protection against losses from named storms and earthquakes across the United States, the same as the 2022 deal.The indemnity and per-occurrence based reinsurance coverage from this second Yosemite Re cat bond will run for a three year term to the end of May 2028, coming on-risk from June 1st this year, sources said.The 2022 deal matures in May this year, so this new issuance appears a renewal of sorts.

We understand that the reinsurance protection from this Yosemite Re 2025-1 cat bond would attach at $280 million of losses to the covered companies, while exhaustion of coverage would be at $390 million of losses.The currently $75 million tranche of Class A Series 2025-1 notes come with an initial attachment probability of 2.54%, an initial expected loss of 1.80% and are being marketed to cat bond investors with spread price guidance in a range from 6.5% to 7.25%, we’re told.For comparison, the $65 million Yosemite Re 2022-1 cat bond had an initial expected loss of 1.16% and priced to pay investors a spread of 9.75%, which was the top-end of their guidance.

As a result, this already looks set to be a far cheaper renewal of the coverage for the StarStone US entities, with pricing conditions in the catastrophe bond market far more conducive in 2025 than they were at the time of the 2022 Yosemite Re issuance.Read all about this catastrophe bond and every other cat bond deal issued in our extensive Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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