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Herbie Re lists $80m of earthquake cat bonds on BSX

Risk business: a new $80 million catastrophe bond will provide earthquake coverage for the West Coast of the US and Canada

Bermuda-based special-purpose insurer Herbie Re Ltd has listed $80 million worth of notes on the Bermuda Stock Exchange.

The Series 2022-1 notes are due on January 8, 2027, the BSX said in a statement. The listing sponsor is Clarien BSX Services Ltd.

According to insurance-linked securities website Artemis.bm, the notes are the fourth Herbie Re catastrophe bond transaction to be sponsored by Bermuda-based underwriter Fidelis Insurance Holdings Limited.

Artemis said Fidelis had been seeking at least $100 million of retrocessional reinsurance against losses from earthquakes in peak regions of the West Coast of North America.

The notes were to be sold to catastrophe bond investors and the proceeds used to collateralise retro reinsurance agreements between the SPI and Fidelis Insurance Bermuda, the ceding company.

Artemis said previous Fidelis cat bonds had covered worldwide perils, like its 2021 Herbie Re, or US named storm and quakes, like the two cat bonds sponsored in 2020 by the firm.

In an update, Artemis said: “We understand that Fidelis has eventually secured only $80 million of retro reinsurance earthquake coverage from this new Herbie Re 2022-1 catastrophe bond issuance, so below its original $100 million target.

“The risk interest spread settled at 12.5 per cent, so at the revised level that is roughly 30 per cent higher than the initially marketed mid-point of pricing.”

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Published November 24, 2022 at 7:37 am (Updated November 24, 2022 at 7:37 am)

Herbie Re lists $80m of earthquake cat bonds on BSX

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