The North Carolina Farm Bureau has now raised the target size for its latest catastrophe bond sponsorship, with protection from the cat bond issuance now expected to fall between $475 million and as much as $500 million, while the price guidance has been reduced for three of the tranches of notes on offer.The North Carolina Farm Bureau (NC Farm Bureau) is a non-profit general farm organisation that also provides financial services, which includes insurance products, to its member base.The NC Farm Bureau had returned to the catastrophe bond market for a second time earlier this month, This Blue Ridge Re Series 2025-1 issuance is designed to provide broader catastrophe reinsurance coverage for the NC Farm Bureau as well, given it features multiple perils and an aggregate tranche of notes as well as three to offer per-occurrence protection to the sponsor.The now targeted between $475 million to $500 million issuance is offering four tranches of Series 2025-1 catastrophe bond notes to investors, with each set to provide reinsurance covering losses in the state of North Carolina to the same underwriting entities North Carolina Farm Bureau Insurance Company and Farm Bureau Insurance of North Carolina as were protected by the company’s first cat bond in 2023.

As we’ve previously explained, the four tranches of notes will provide three years of coverage for calendar years 2026 through 2028 across the state of North Carolina against losses from named storms, severe thunderstorms and winter storms.Two tranches of notes will cover named storms and severe thunderstorms on a per-occurrence basis, while one will cover only named storms on a per-occurrence basis.However, the fourth tranche is the one that will provide annual aggregate protection for losses from named storms, severe thunderstorms and winter storms, with all four tranches using an indemnity trigger.

Sources have informed us that the target for all four tranches of notes have been upsized, with each of the notes’ price guidance also updated too, largely seeing declines in spreads.A further update saw the price range for three of the tranches reduced once more, while the fourth tranche stayed the same.What was a $100 million Series 2025-1 Class A tranche of notes are now targeted to provide $150 million in named storm and severe thunderstorm per-occurrence protection attaching at $1 billion of losses and covering a share up to $1.65 billion, giving them an initial attachment probability of 1.56%, and an initial expected loss of 1.1%.

These notes were first offered to investors with price guidance in a range from 4% to 4.5% but then fell to a new range of between 3.75% to 4%, and we have now been told they have narrowed even further to a spread of 3.5% to 3.75%.What was a $100 million Series 2025-1 Class B tranche of notes are also now targeted to provide $150 million of named storm and severe thunderstorm per-occurrence protection attaching at $500 million of losses and covering a share up to $1 billion, giving them an initial attachment probability of 3.7%, and an initial expected loss of 2.38%.These notes were first offered to cat bond investors with price guidance in a range from 7% to 7.5%, which then later narrowed to a revised range of 6.5% to 7%, but we are now told these notes have dropped even lower to a spread of 6% to 6.5%.

What was a $75 million Series 2025-1 Class C tranche of notes have now been upsized to $100 million.It’s important to remember that these notes will provide only named storm per-occurrence protection attaching at $300 million of losses and covering a share up to $500 million, giving them an initial attachment probability of 4.69%, and an initial expected loss of 3.76%.These notes were first offered to investors with price guidance in a range from 9.25% to 9.75%, which then fell to a lower spread of 8.5% to 9.25%, however, we’ve been told that these notes have fallen further to a tighter spread guidance of 8% to 8.5%.

The final Class D tranche of notes were originally sized at $50 million, are now targeted to be between $75 million and $100 million.These notes will provide named storm, severe thunderstorm and winter storm annual aggregate protection attaching at $225 million of losses and covering a share up to $325 million after a franchise deductible of $50 million per-event, giving them an initial attachment probability of 2.92%, and an initial expected loss of 1.3%.These notes were originally being offered to cat bond investors with price guidance in a range from 10.5% to 11.5%, but they are now being offered at the mid-point of that, for a spread of 11%.

All of which suggests the NC Farm Bureau is well on-track to secure a much larger catastrophe bond sponsorship during its return to the market, to provide more reinsurance than originally targeted from the capital markets and largely at lower pricing than the initial guidance.As a reminder, you can read all about this new   catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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