Liberty Mutual Insurance has adjusted its target for its latest catastrophe bond sponsorship, with now between $120 million and $150 million of catastrophe reinsurance limit sought from the issuance, while the riskiest tranche of notes has been dropped from the offering, Artemis has learned.The US and international primary insurance and reinsurance group returned to the market in November, 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.

Initially, Liberty Mutual was aiming to secure at least $125 million of indemnity based, multi-peril catastrophe reinsurance protection from the capital markets from an issuance of three tranches of Series 2026-1 notes.Now, we’re told only the two lower risk tranches remain in this offering, with a higher-risk tranche no longer set to be issued, while the target across the remaining two tranches is to secure between $120 million and $150 million of catastrophe reinsurance limit.The remaining two tranches of 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, over a three calendar year term, from January 1st 2026 to the end of 2028.

What was initially a $40 million tranche of Class A notes are now offered at between that and $50 million in size.The Class A notes come with an initial expected loss of 1.42% and were first offered with spread price guidance in a range from 3.25% to 3.75%, which has now been revised to the low-end at 3.25%.What was a $60 million Class B tranche are now targeted to be between $80 million and $100 million in size.

The Class B notes come with an initial expected loss of 3.62% and were first offered with spread price guidance in a range from 6.75% to 7.25%, which has now been revised to 6.9%.A $25 million Class C tranche of notes will not now be issued, we are told.As we said before, this tranche of notes with an initial expected loss of 11.19% were one of the riskiest ever to come from the Mystic Re program and we did suggest that given the lack of price guidance this could have been a case of Liberty Mutual testing the cat bond market’s appetite for this risk.

Seemingly the market did not have the appetite this time, at the kind of pricing the sponsor wanted to achieve.Still, it’s good to see Liberty Mutual persisting with the other two tranches of notes.Given the $150 million cat bond is scheduled to mature in early January, there is still a chance that expiring reinsurance limit is fully replaced by this eleventh cat bond in the Mystic Re series.

You can read all about this catastrophe bond from Liberty Mutual and every other cat bond issued in the 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.