Convex Group, the specialty insurance and reinsurance company, has now focused in on securing 50% more protection from its latest   catastrophe bond, with $150 million said to be the ambition but at lower pricing still as the price guidance has fallen for a second time, Artemis has learned.Convex had ventured back into the catastrophe bond market earlier this month, with an initial target to secure $100 million of retrocessional protection from the capital markets.As we then reported in an update yesterday, the size target for this third catastrophe bond under Hypatia Ltd.for Convex had risen to between $125 million and $150 million, while the price guidance was updated below the initial range.

Now, we’re told the target size for this Hypatia 2025-1 catastrophe bond has been set at the upper-end of $150 million, suggesting a 50% upsizing is now possible.While the price guidance has been revised and lowered again, suggesting very strong execution for Convex of its third catastrophe bond sponsorship is now possible.Recall that, this Hypatia Series 2025-1 cat bond issuance will provide protection for the peak North American perils of hurricane and earthquake risks, on an industry loss trigger and annual aggregate basis over a three-year term, covering Convex Re, the Convex group reinsurance entity, as well as subsidiary entities.

The now expected to be $150 million of Class A notes come with an initial base expected loss of 4.48%.To show how the pricing has fallen, the notes were first offered to investors with price guidance for a spread of between 10% to 10.5%, but that was then updated to a range of 9% to 10% in the first update we learned on this deal.Now, we’re told in a second update the price guidance has been reduced again, with a spread of 8.5% to 9% now offered with the notes.

At the upper-end of that revised range the spread multiple-at-market of expected loss paid to investors would be just slightly above 2 times.While should it price at the mid-point of the revised guidance the spread multiple would come in at 1.95 times the expected loss.Which indicates strong demand for Convex’s third catastrophe bond, perhaps also for industry-loss trigger cat bonds.

In the last year or two these structures have come under increasing price pressure (more so than indemnity cat bonds), due to high investor demand.But some market sources suggest they now find pricing for many industry-loss cat bonds too low to meet their risk-return requirements in every case, and so have begun to underweight them in their portfolios.You can read all about Convex’s third catastrophe bond, this   transaction, and almost every other cat bond ever issued in the Artemis Deal Directory..

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