Allstate is now focused on securing a $200 million four year source of Florida catastrophe reinsurance protection with its latest catastrophe bond, as a three year tranche of notes has now been dropped from this Sanders Re III Ltd. (Series 2026-2) issuance, Artemis has been told.
The offering saw two tranches of notes on offer, one targeting three years of reinsurance, another four years, each with the same risk metrics.
We said at the time that it was possible a tranche was dropped from the issuance depending on investors response to the deal, which now seems to have been the case.
We’re told the three year tranche of notes will no longer be issued, as Allstate continues to target the initial $200 million issuance size, but only supplied by the tranche of four year notes.
As we said, this new Florida-focused cat bond sponsorship takes the number of Sanders Re deals we’ve analysed from Allstate to twenty-five, while it makes twenty-seven cat bonds in total that we’ve tracked and analysed from the insurer.
Read about every cat bond sponsored by Allstate in our Deal Directory.
Sanders Re III Ltd. is now offering a single $200 million tranche of Class A-2 Series 2026-2 notes, to provide Allstate with a four year source of fully-collateralized reinsurance, on a cascading indemnity and per-occurrence trigger basis.
The notes will provide it with reinsurance against losses from the perils of Florida named storm, earthquake, severe weather, wildfire, volcanic eruption, and meteorite impact.
The $200 million of Series 2026-2 Class A-2 tranche of notes still being offered will have a four year term to the end of May 2030.
The Class A-2 notes come with an initial base expected loss of 1.07% and were first offered with spread price guidance in a range from 4.5% to 5.25%.
We’re now told that price guidance has been revised and updated to a new range of 4% to 4.5%, as Allstate targets lower pricing for the reinsurance coverage the notes will provide.
The Class A-2 notes will occupy a $200 million layer of Allstate’s Florida reinsurance tower, so seemingly do not have room to upsize.
As a result, with a $300 million Class A tranche of notes from its Sanders Re III 2023-2 Florida-focused cat bond scheduled to mature this June, it seems Allstate will have less cat bond coverage in Florida this year, although the four year duration of these new cat bond notes will benefit the insurer with longer-term cover.
However, having recently sponsored its largest ever single visit to the cat bond market in March, when it secured $1.2 billion of nationwide (ex-Florida) reinsurance from two Sanders cat bond issuances, Allstate still has much more cat bond protection available to it this year.
Allstate is listed as the largest sponsor of outstanding catastrophe bonds at this time in our leaderboard chart, with $3.8 billion of cat bond reinsurance protection currently in-force.
You can read all about this Sanders Re III Ltd. (Series 2026-2) from Allstate and every other catastrophe bond issuance in the extensive Artemis Deal Directory.
