One William Street Capital Management, L.P.has now secured its debut catastrophe bond, with the asset manager set to receive a slightly upsized $135 million of collateralized retro reinsurance from the issuance, while all three tranches of notes priced at their low-ends of twice reduced guidance.Notably, the final pricing for each of the tranches of cat bond notes Meadows Ltd.is set to issue has been secured at very low multiples of expected loss, indicating that extremely strong execution conditions are continuing in the catastrophe bond market at this time, to the benefit of sponsors.

This cat bond transaction is set to provide $135 million of fully-collateralized retrocessional catastrophe reinsurance to a cedent named OIS Series 2 LLC, which is a wholly owned subsidiary of New York headquartered alternative asset manager and registered investment adviser One William Street Capital Management, L.P.One William Street Capital Management manages around US $8 billion in assets and invests in the insurance-linked securities (ILS) sector, through a range of structures from private reinsurance, through sidecars, and catastrophe bonds.OIS Series 2 LLC is a fund structure that holds ILS investments for One William Street Capital, so it appears this debut cat bond is being issued to source retrocessional reinsurance, or risk transfer capital, to provide a hedge for the manager’s insurance-linked securities portfolio.

, the offering size for this Meadows Series 2025-1 cat bond issuance was $125 million.Then, in a first update on this transaction, .In a second update we reported that .

Now, we’re told that the Meadows Ltd.Series 2025-1 catastrophe bond has been successfully priced for One William Street Capital, securing the upsized target of $135 million of retro reinsurance protection for the asset manager.With that protection secured at particularly attractive pricing it appears, as the multiples-at-market of expected loss for each tranche of notes are to settle at low levels, indicating the soft pricing conditions in the cat bond issuance market.

This cat bond will provide One William Street Capital’s investment fund entity with reinsurance on an industry-loss trigger basis, with both occurrence and annual aggregate protection set to cover losses from the peril of US named storms, running until the end of November 2029.The Class A notes upsized slightly to $55 million.These notes will provide industry-loss trigger per-occurrence protection against losses from named storms in Florida, Puerto Rico and the US Virgin Islands.

The Class A notes have an initial base expected loss of 6.96%.They were first offered to cat bond investors with price guidance in a range from 13.5% to 14.5%, which was then revised lower to between 12.75% to 13.5%, then revised a second time to a range of 12.25% to 12.75% and are now set to price at the lowest-end of 12.25%, sources said.The Class B notes remained at their initial $50 million size to provide industry-loss trigger per-occurrence protection against losses from named storms across the United States 50 states and D.C.

but excluding Florida.The Class B notes will have an initial base expected loss of 7.77%.They were first offered to cat bond investors with price guidance in a range from 12.5% to 13.5%, which was first revised down to a range of 12% to 12.5%, then revised down again to between 11.5% and 12% and have now also priced at the lowest end of 11.5%.

The Class C notes also  slightly upsized to $30 million and will provide industry-loss trigger annual aggregate protection against losses from named storms across the US states of Florida, Georgia, North and South Carolina, Puerto Rico and the US Virgin Islands.The Class C notes come with an initial base expected loss of 2.14%.They were first offered to cat bond investors with price guidance in a range from 8.75% to 9.75%, which was lowered to a revised range of 8% to 8.75%, then lowered a second time to between 7.5% and 8% and have now been priced to pay a spread of 7.5%, so again the lowest-end we are told.

In multiple-at-market of expected loss terms, the Class A notes will pay investors just 1.76 times EL, the Class B notes will pay just 1.48 times EL and the lower-risk Class C notes will pay 3.5 times EL.Once again, the pricing is reflecting the strong demand in the catastrophe bond market, with still excess cash at certain managers and others keen to deploy more, while new investors have continued to enter the space.We are being told the multi-strat specialists are also exerting some pressure on pricing at this time, as an increasing number of US and global asset managers are now adding cat bonds to multi-asset class investment fund portfolios.

In price multiple terms, some of those seen with this transaction look like spread multiples we would only have seen prior to 2021, perhaps earlier, which is continuing the current trend that sees most of the spread gains of recent years eroded at this time.It remains to be seen whether that persists if issuance can pick up to the levels needed to satisfy demand.One this is clear though.

The cat bond market issuance conditions currently being seen are some of the most favourable for sponsors in years.Meaning cedents would be foolish not to explore their options to sponsor insurance-linked securities at this time.You can read all about this new catastrophe bond from One William Street Capital and every other cat bond transaction issued in our Deal Directory..

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