Fidelis Insurance has raised the target size for its new catastrophe bond to provide $90 million of worldwide aggregate retrocession through the Herbie Re Ltd. (Series 2025-1) issuance, while the price guidance for the notes has been updated at the low-end of guidance, Artemis has learned.
As we explained at the time, this new issuance seems to be an attempt to at least in part to renew worldwide annual aggregate retrocession that Fidelis’ $150 million Herbie Re 2021-1 catastrophe bond had provided.
The 2021-1 cat bond had been affected by losses, with Fidelis expected to benefit from a reinsurance recovery after events including 2024 hurricanes and the January 2025 California wildfires saw qualifying annual aggregate losses under the deal exceeding the attachment point. That 2021 deal also matures at the end of this month.
We’re now told by sources that Fidelis’ target for the new Herbie Re 2025-1 cat bond has risen, with $90 million of retrocessional protection now being sought from the issuance.
At the same time the price guidance for the notes has been updated and lowered to the bottom-end of the initial range.
This will become the the seventh Herbie Re catastrophe bond transaction to be sponsored by Fidelis Insurance, since it first entered the cat bond market back in 2020.
So, Herbie Re Ltd. is now targeted to issue $90 million of Series 2025-1 cat bond notes, with the proceeds set to collateralize a source of annual aggregate and worldwide multi-peril retrocessional protection for Fidelis.
The notes will provide coverage for many of the world’s peak catastrophe perils for the company, with the retro protection structured on an annual aggregate and industry loss index basis, across a two-year term and two annual risk periods to the end of May 2027.
The Herbie Re Series 2025-1 Class A cat bond notes come with an initial expected loss of 8.79% and were initially offered to investors with price guidance in a range from 31% to 32%.
We’re now told that the price guidance has been updated to an initial risk interest spread of 31%, so at the lowest-end of guidance.
While the multiple-at-market still looks substantially higher than the 2021 issuance, it is encouraging to see Fidelis looking to upsize the cat bond as investors respond positively and help the price target come down.
Read all about this Herbie Re Ltd. (Series 2025-1) catastrophe bond comes to market and you can read about this and every other cat bond deal in the Artemis Deal Directory.
