Specialty insurance and reinsurance company Convex Group is back in the catastrophe bond market with an initial $100 million or greater target for its third sponsorship, a   cat bond issuance, Artemis has learned.Convex first entered the catastrophe bond market back in 2020, when it secured $300 million of protection from the capital markets with its first Hypatia deal.The company then returned in 2023 and .With that 2023 cat bond still in-force, having its maturity scheduled for early April 2026, it’s good to see Convex returning and looking to layer on a further three years of protection from the capital markets with its third catastrophe bond in the Hypatia series of deals.

This 2025 Hypatia cat bond issuance sees Convex looking to extend its coverage for the same perils and in the same format as previous deals, being protection for the peak North American perils of hurricane and earthquake risks, on an industry loss basis.Bermuda based special purpose insurer Hypatia Ltd.is offering a single tranche of Series 2025-1 cat bond notes, with an initial target of $100 million or greater for this issuance.

The ceding company will be Convex Re, the Convex group reinsurance entity, but we understand the cat bond will also cover subsidiary entities, such as Convex’s UK insurer.So, the Hypatia 2025-1 catastrophe bond will provide retrocessional reinsurance to the Convex Re reinsurance division and subsidiary group entities, just like the first two cat bond arrangements.The $100 million or greater in Series 2025-1 Class A notes that Hypatia will issue will be exposed to losses from U.S.

named storms, including Puerto Rico, D.C and the US Virgin Islands, and both U.S., those territories and Canadian earthquake risks, we understand.The notes will provide annual aggregate protection using a weighted PCS industry loss index trigger, and the coverage will run across a three year term with maturity expected in early July 2028, sources said.We’re told that the $100 million of Hypatia Ltd.

Series 2025-1 cat bond notes will provide Convex with aggregate industry loss based retro reinsurance, after an attachment point of $80 billion of losses, covering up to $100 billion, with a $10 billion franchise deductible to be enforced.As a result, the Class A notes will come with an initial attachment probability of 5.47%, an initial base expected loss of 4.48% and they are being offered to investors with price guidance for a spread of between 10% to 10.5%.Convex’s last cat bond it sponsored in 2023 came with an initial expected loss of 2.52% and priced to pay investors a spread of 9.5%, so paid a spread multiple-at-market of almost 3.77 times EL.

The 2020 cat bond featured two tranches, with a multiple of 3.9 times the EL of 1.71% for the lower-risk layer of notes and 3.2 times the EL of 3.06% for the higher-risk notes.This new 2025-1 cat bond from Hypatia Ltd.would have a multiple of 2.29 times the expected loss at the mid-point of initial guidance, so the pricing is clearly lower despite this being a higher-risk tranche of notes (in expected loss terms) than any of the previous three in the series.

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..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.