Swiss Re has now seen its new North America earthquake catastrophe bond successfully priced, finalising the issuance to secure a one-third upsized $100 million of protection, while the spreads settled at the low-end of reduced guidance, Artemis has learned.Swiss Re ventured back to the catastrophe bond market in late August for what is its fourteenth takedown under the Bermuda-based Matterhorn Re catastrophe bond program and its third cat bond sponsorship of 2025 so far.The initial target was to secure $75 million of North American earthquake retrocessional reinsurance from this new cat bond deal., the target size remained at its initial $75 million, but the spread guidance was lowered for both of the tranches of notes that have been offered.

, with the target size increased by one-third to $100 million while the pricing fell to the bottom end of the reduced ranges in both cases.Now, sources have told us that the Matterhorn re 2025-3 catastrophe bond was successfully priced for Swiss Re at the end of last week, securing the one-third upsized $100 million of retro quake limit at the lowest pricing points..

Matterhorn Re Ltd.will issue two tranches of Series 2025-3 cat bond notes to now provide Swiss Re with $100 million of retrocessional reinsurance protection against losses from North American earthquakes.That retro coverage will be on an annual aggregate and weighted PCS industry loss index trigger basis, across the United States (excluding Hawaii), DC and Canada over a three year term.

The Series 2025-3 Class A notes were upsized from $50 million to $60 million, while the Class B tranche grew in size from $25 million to $40 million thanks to investor demand.The Class A notes have an initial expected loss of 0.97% and were first offered to investors with price guidance in a range from 2.75% to 3.75%, which was lowered to 2.5% to 2.75% at the first update and then fixed at the low-end of 2.5% which is where we’re now told these notes were priced.As a result, the Class A tranche of notes saw their pricing fall roughly 23% from the mid-point of the initial guidance range.

The Class B notes are riskier and have an initial expected loss of 2%.There were at first offered to investors with price guidance in a range from 4% to 4.5%, but also fell to an updated range of 3.75% to 4% and were then fixed at the low-end again, for a spread of 3.75% which is where we’re told they have now been priced.As a result, the Class B tranche of notes saw their pricing fall around 12% from their initial guidance mid-point.

So, Swiss Re has now secured a larger than anticipated amount of retrocessional earthquake reinsurance protection from its latest catastrophe bond deal at pricing that has proved very attractive as well.It shows investor demand for new paper remains high in the catastrophe bond market, as the multiples for this latest deal have tumbled to relatively low levels, even for the quake peril which often prices with thin multiples-at-market.This bodes well for sponsors of diversifying cat bond deals (non-hurricane) that might choose to come to market during the remainder of the US wind season.

You can read all about this new catastrophe bond from Swiss Re, the   transaction, 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.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.