Beazley has continues to seek $100 million of natural catastrophe reinsurance through its third natural catastrophe bond, the London Bridge 2 PCC Limited (Fuchsia 3 – 2025-1) deal, but the company is aiming to capitalise on investor appetite and has lowered the price guidance for the notes, Artemis can report.
Initially the target was to secure $100 million of peak peril catastrophe reinsurance on a fully-collateralized basis from this issuance.
That target remains the same, we are told, but Beazley like most cat bond sponsors looks set to be able to lower the pricing of the risk interest spread it will pay for the coverage.
This will be Beazley’s seventh 144A catastrophe bond issuance, as the company continues to demonstrate its appetite to leverage the capital markets to source efficient reinsurance for its peak exposures, both natural catastrophe and specialty lines related.
Including its private cyber cat bonds, we now have 10 entries in our extensive Deal Directory for catastrophe bonds sponsored by Beazley.
For its third catastrophe bond covering natural perils, Beazley is again using the Lloyd’s insurance-linked securities (ILS) structure London Bridge 2 PCC Limited, and this Fuchsia 3 cat bond will become the fifth 144A cat bond issued by London Bridge 2 PCC.
The still $100 million of Fuchsia 3 Series 2025-1 notes that London Bridge 2 PCC is offering will provide Beazley with reinsurance for losses from named storm and earthquake events that impact the United States, Canada and certain parts of the Caribbean across a more than three year term, running from January 2026 to the end of March 2029 and on an indemnity trigger and per-occurrence basis.
The still $100 million of Fuchsia 3 2025-1 cat bond notes come with an initial expected loss of 0.93% and were first offered to investors with spread price guidance in a range from 3.75% to 4.5%. That guidance has now been lowered to a revised range of 3.5% to 3.75%, we are told.
As a result, Beazley looks set to prioritise price over size with its latest catastrophe bond, unless the company opts to upsize it after it has an indication of the final pricing, which can sometimes occur.
You can read all about this London Bridge 2 PCC Limited (Fuchsia 3 – 2025-1) catastrophe bond transaction in our Deal Directory, where you can analyse details of almost every cat bond ever issued.
