Progressive, the US insurance company, has now priced and successfully secured the 79% upsized $125 million of aggregate catastrophe reinsurance limit from its latest catastrophe bond, with the issuance now priced at the low-end of reduced guidance, Artemis understands.Progressive came back to the cat bond market in November, with an initial target to secure a $70 million or more one-year source of annual aggregate and multi-peril reinsurance protection from the capital markets., with Progressive seeking $100 million of protection, while the price guidance for the notes had also been lowered Then, in reinsurance from the deal, while the pricing had been fixed at the lower-end of the reduced guidance.Now, we’re told that Progressive successfully priced its new Bonanza Re 2025-1 catastrophe bond at that low-end of reduced guidance, to provide the 79% upsized target of $125 million of annual aggregate catastrophe reinsurance protection.

As a result, Bonanza Re Ltd.will now issue $125 million of Series 2025-1 Class A discount zero-coupon cat bond notes that will provide Progressive with a one year source of aggregate reinsurance covering qualifying losses from named storm, earthquake (fire-following only), severe thunderstorm, winter storm and wildfire across the United States, running across calendar year 2026.The $125 million of Series 2025-1 Class A notes that Bonanza Re Ltd.

will issue come with an initial expected loss of 5.53%.The notes were first offered with price guidance in a range from 80% to 82% of par (being zero-coupon in nature), which was later updated to 82% to 84% of par and then fixed at 84% of par, which is where they have now been priced.That’s a very rough spread equivalent of 16%, which has come down from a mid-point of 19% when the notes were first offered.

With this new cat bond priced, Progressive will more than replace its soon to mature $70 million aggregate tranche of the cat bond issuance, while also securing that enlarged reinsurance coverage at an attractive price.You can read all about this catastrophe bond and every other cat bond ever issued in the Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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