AXA XL has now successfully secured its targeted $175 million of industry loss based retrocession from the capital markets through the catastrophe bond, with one tranche of notes priced at the bottom of initial guidance, the other below its initially marketed range.AXA XL, the global specialty insurance and reinsurance unit of the AXA Group, returned to the catastrophe bond market in November, its first time in the market since December 2023.The initial target was to secure $175 million of retrocessional catastrophe reinsurance from the capital markets and that did not change, as the re/insurer seemingly prioritised securing the deal at the most efficient pricing possible. the price guidance for the Galileo Re 2025-1 cat bond notes was lowered during the marketing phase of the issuance, as investors demonstrate their appetite for risk from respected sponsors.

Sources have now informed us that the notes have been priced and as a result AXA XL is set to secure its targeted retrocessional catastrophe reinsurance at attractive pricing.So, now finalised and priced the two tranches of Galileo Re 2025-1 cat bond notes will provide AXA XL’s underwriting entities with a $175 million source of protection against losses from U.S., DC, Puerto Rico, and Virgin Islands named storm, as well as U.S.and Canada earthquakes, on a per-occurrence and weighted industry loss index trigger basis, over a four year term to the end of 2029.

The $85 million Class A tranche of Series 2025-1 notes that Galileo Re Ltd.will issue will provide AXA XL with coverage for losses from named storms only, across the regions mentioned above.The Class A notes come with an initial base expected loss of 1.39% and were initially offered to cat bond investors with price guidance for a spread in a range from 3.25% to 3.75%, which was later reduced to a revised range of between 3% to 3.25%.

We’re now told these notes have been priced at 3.25%, so at the bottom of the initial guidance.The $90 million Class B tranche of Series 2025-1 notes will provide AXA XL with coverage for losses from named storms and earthquakes, across the regions mentioned.The Class B tranche of notes come with an initial base expected loss of 2.95% and were initially offered to cat bond investors with price guidance for a spread in a range from 5.25% to 6%, which was later lowered to a revised range of between 5% to 5.25%.

Now, we’re told these notes have been priced to pay investors a spread of 5%, so below the initially marketed range.So, with its previous cat bond notes set to mature soon, it’s encouraging to see AXA XL return to the cat bond market and secure this new issuance at attractive pricing.This new cat bond shows that AXA XL intends to utilise the cat bond structure to further augment its retrocession arrangements, including for a range of perils and regions.

As a reminder, you can read all about AXA XL’s new  transaction in our extensive Deal Directory, where you can analyse details of almost every catastrophe bond ever issued..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.