One Alliance North America Insurance Company, a US homeowners and commercial lines specialist underwriter and carrier, has now secured $115 million of multi-peril reinsurance from the capital markets as its debut One Shield Re Ltd. (Series 2026-1) catastrophe bond issuance has now been priced, Artemis can report.
The insurer’s initial target was to secure $100 million or more in multi-peril reinsurance through the debut One Shield Re Series 2026-1 issuance, as One Alliance North America sought to lock-in multi-year and fully-collateralized protection in 144A cat bond form for the first time.
As we reported in our first update on this One Shield Re Series 2026-1 cat bond offering, the sponsor revised its target for reinsurance to between the initial $100 million and as much as $125 million of protection, while the price guidance was fixed within the upper-half of the initial range.
Now, we’re told that One Alliance North America Insurance has settled for $115 million of reinsurance from its debut cat bond sponsorship, with the notes now priced in that upper-half of guidance.
Bermuda based special purpose insurer One Shield Re Ltd. will now issue a single $115 million Class A tranche of Series 2026-1 notes, that will be sold to investors and the proceeds used to collateralize a reinsurance agreement with the sponsor, One Alliance North America.
The cat bond will provide One Alliance North America with a $115 million three-year source of named storm and wildfire reinsurance, on an indemnity trigger and per-occurrence basis, running from issuance through to April 2029. The named storm reinsurance is for the states of Florida, Georgia, Hawaii, North Carolina, South Carolina and Texas, while the fire protection is solely for the state of California.
The now confirmed as $115 million of Class A notes that One Shield Re Ltd. will issue come with an initial base expected loss of 2.45%.
At first they were offered to cat bond investors with price guidance for a risk interest spread of between 7.5% and 8.25%, but that was later fixed at an 8% risk interest spread and this is where the notes have now been priced.
With this, One Alliance North America Insurance has secured more than its initial target for reinsurance from the capital markets, priced slightly above the mid-point of initial guidance. A successful result for a first-time sponsor, securing an efficient and long-term source of reinsurance capacity from the catastrophe bond market.
The fact the notes priced up slightly is a relatively unusual occurrence for recent months, with most cat bonds pricing down. It demonstrates that cat bond investors continue to have risk-return requirements they need to hit and will not chase pricing down on every offering that hits the market.
It’s also worth highlighting again that the sole structuring agent and bookrunner for this first One Shield Re Ltd. catastrophe bond has been Lockton Re Capital Markets, the first time it has had a sole role on both fronts, a notable development for the company as it looks to win more cat bond market business.
As a reminder, you can read all about this One Shield Re Ltd. (Series 2026-1) cat bond and every other catastrophe bond deal ever issued in our Artemis Deal Directory.
