Hamilton Insurance Group is preparing to increase the issuance size of its latest catastrophe bond, Easton Re Ltd. (Series 2027-1), to $300 million, concurrently adjusting the pricing for a more attractive offering to investors, as reported by industry sources.
Earlier this month, the Bermuda-based insurance and reinsurance conglomerate, Hamilton Insurance Group, re-entered the catastrophe bond market with an initial objective to secure $250 million in protection through the Easton Re 2027-1 transaction. This issuance is seen as a strategic renewal and significant expansion of their existing coverage, particularly as their $200 million Easton Re Ltd. (Series 2024-1) cat bond approaches maturity early next year.
The 2027-1 offering marks the third 144A catastrophe bond under the Easton Re brand for Hamilton’s reinsurance division, Hamilton Re, following a prior private cat bond issuance. The current offering presents investors with a single $300 million Class A tranche of Series 2027-1 notes, an increase from the initial $250 million target. These notes are designed to provide Hamilton Re and its affiliates with industry-loss trigger and per-occurrence retrocession coverage against named storms in the U.S., D.C., Puerto Rico, and the Virgin Islands, as well as earthquakes in the U.S. and Canada, for a duration of three years.
The $300 million Series 2027-1 Class A notes carry an initial expected loss of 2.66%. Originally, these notes were introduced to catastrophe bond investors with a spread price guidance ranging from 4.75% to 5.25%. This guidance has since been reduced to a revised range of 4% to 4.75%, indicating a more competitive yield for potential buyers.
This expansion of Hamilton's catastrophe bond protection, coupled with the downward adjustment in pricing, is a positive development within the market. It reflects a well-capitalized environment where fund managers are eager to deploy capital, leading to more favorable terms for issuers. The ability to increase coverage while securing lower pricing highlights the current robust state of the catastrophe bond market.
In summary, Hamilton Insurance Group is enhancing its risk transfer strategy by expanding its Easton Re catastrophe bond program to $300 million and achieving more advantageous pricing. This initiative underscores the company's commitment to robust protection and leverages a supportive market environment to optimize its reinsurance capital. The successful upsizing and repricing of this bond will solidify Hamilton's retrocessional capacity against various natural perils.
