Insurance carrier Liberty Mutual Insurance has lifted its target for its new catastrophe bond transaction to up to $300 million of collateralized reinsurance protection.Liberty Mutual’s latest catastrophe bond issuance was launched to the market in late May, with a target for $240 million of indemnity reinsurance protection for hurricane and earthquake loss events.It sees the carrier seeking indemnity trigger based reinsurance protection for a broader coverage area than its last cat bond, which featured an industry loss trigger.Now, the target has been lifted, we understand Liberty Mutual is aiming to secure up to $300 million of coverage for losses from named storms and earthquakes affecting the US, Canada and the Caribbean.

So, Mystic Re IV Ltd.will issue two tranches of Series 2021-2 notes, to provide Liberty Mutual with between $240 million and $300 million of collateralized reinsurance protection on a per-occurrence and indemnity trigger basis, across a roughly three and a half year term, to include four US hurricane seasons.The Class A tranche of notes will cover a percentage of losses from an attachment point of $1.5 billion to an exhaustion point of $3 billion, giving the noted an expected loss of 2.53%.

The Class A tranche is now targeting between $180 million and $225 million of protection.They were first offered to investors with price guidance in a range from 5.25% to 6%, but we’re now told the range has been narrowed towards the mid-point at between 5.5% and 5.75%.The riskier Class B tranche of notes will cover losses from an attachment of $1 billion to $1.5 billion, so sitting beneath the Class A layer in the reinsurance tower, giving the notes an initial expected loss of 5.98%.

The Class B tranche is now targeting from $60 million to $75 million of protection for Liberty Mutual.They were first marketed with price guidance in a range from 11.25% to 12%, but this has now also narrowed and has fallen to below the initial range at 10.75% to 11.25%.So it appears that Liberty Mutual should secure at least its targeted reinsurance from its latest cat bond, perhaps more at up to $300 million of cover, while pricing is set to fall towards the middle or lower-end of the spread guidance ranges.

You can read all about this catastrophe bond from Liberty Mutual and every other cat bond 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.