Mangrove Property Insurance continues to target between $100 million and $111 million of named storm reinsurance protection from its debut Buttonwood Re Ltd. (Series 2026-1) catastrophe bond sponsorship, but the company seeks to capitalise on investor appetite and has lowered and adjusted the price guidance for the notes on offer again, Artemis has learned.
Initially, Mangrove was targeting $100 million of reinsurance across issuance of four tranches of Series 2026-1 cat bond notes by Buttonwood Re, that will be sold to investors and the proceeds used to collateralize reinsurance agreements with the cedent, Mangrove.
However, as we reported in our first update on this transaction, Mangrove lifted the target size for this Buttonwood Re Series 2026-1 cat bond sponsorship to seek between $100 million and as much as $111 million of reinsurance, while at the same time, the price guidance was adjusted for each of the four tranches of notes on offer.
We’re told that $100 million to $111 million target remains the same, however, Mangrove is still seeking to secure that protection at a more cost-effective rate, as the price guidance has been lowered and adjusted once again for each of the tranches on offer.
As we’ve explained in previous articles, the first three tranches of Series 2026-1 notes on offer will provide indemnity and per-occurrence reinsurance, while the fourth will provide a source of indemnity triggered annual aggregate protection, all covering named storms and set to run across a roughly three-year term.
Buttonwood Re continues to offer a $25 million tranche of Series 2026-1 Class A occurrence notes that will have initial base expected loss of 1.10%. These notes were first offered to cat bond investors with spread price guidance in a range from 5.5% to 6.25%, which was later updated to a tighter spread of between 5% to 5.5%.
We are told that guidance has now been revised to a single figure of 5%, so the lowest end of the reduced guidance.
Buttonwood Re also continues to offer a $25 million tranche of Series 2026-1 Class B occurrence notes that will have an initial base expected loss of 1.71%. These notes were originally offered to cat bond investors with spread price guidance in a range from 6.5% to 7.25%, which was later updated to a tighter spread of 6.5% to 7%.
We understand that guidance has now been revised to a single figure of 6.5%, so the low-end of initial guidance.
A further tranche of Series 2026-1 Class C occurrence notes remain at their targeted size of $25 million. These notes will have an initial base expected loss of 2.59%, and these were initially offered to cat bond investors with spread price guidance in a range from 8% to 8.75%, which later shifted to a tighter spread of 8% to 8.25%.
We now understand that guidance has been revised to a single figure of 8%, so the lowest end of initial guidance.
The final tranche of Series 2026-1 Class D notes are still targeted between $25 million and up to $36 million in size. These notes will have an initial base expected loss of 0.13%, and initially these were offered to cat bond investors with spread price guidance in a range from 6.5% to 7.25%, which was later updated to a tighter spread of between 6% to 6.5%.
We’re now told this price guidance has been lowered once again, to a revised range of 5.5% and 6%.
With Mangrove once again lowering and adjusting the price of the notes on offer, it clearly shows that the insurer is looking to capitalise on catastrophe bond investor appetite to potentially gain more reinsurance support from the capital markets at more attractive pricing, from its debut cat bond sponsorship.
As a reminder, you can read all about this new Buttonwood Re Ltd. (Series 2026-1) catastrophe bond and view details of more than 1,000 other cat bond issuances in the extensive Artemis Deal Directory.
