The new Foundation Re IV Ltd. (Series 2026-1) catastrophe bond transaction that is being sponsored by US primary property and casualty insurer The Hartford, has seen its price guidance lowered during the marketing phase of the issuance, as investors demonstrate their appetite for risk from respected sponsors.
As we reported in November, The Hartford returned to the catastrophe bond market for its second takedown under the Bermuda-based special purpose insurer (SPI) Foundation Re IV Ltd.
However, this new cat bond will become the seventh to be sponsored by The Hartford since it brought to market the first in its series of Foundation Re cat bond deals back in 2004.
You can read about every Foundation Re catastrophe bond from The Hartford in our extensive Deal Directory.
Foundation Re IV Ltd. is still seeking to issue a single tranche of $270 million Series 2026-1 Class A notes that will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the issuer and ceding company, with the beneficiaries being Hartford Fire Insurance Co. and subsidiaries
The Class A notes are designed to provide The Hartford with a $270 million source of collateralized US named storm and earthquake protection, including for D.C. and Puerto Rico, across a four calendar year term running to the end of 2029.
As we’ve previously explained, this protection will be on an indemnity trigger and per-occurrence basis.
The currently $270 million of Series 2026-1 Class A notes that Foundation Re IV Ltd. is set to issue come with an initial attachment probability of 1.35%, an initial base expected loss of 1.18% and were first offered to cat bond investors for a spread of between 3.75% to 4.25%.
That price guidance has now been lowered to a revised spread range of between 3.25% and 3.75%, we understand.
The Hartford looks set to secure its latest catastrophe bond at attractive pricing levels, with the market still executing keenly on price to provide significant value to sponsors.
As a reminder, you can read all about this new Foundation Re IV Ltd. (Series 2026-1) cat bond transaction from The Hartford and details of almost every catastrophe bond ever issued in our extensive Deal Directory.
