Kin Insurance, the direct to consumer insurtech, appears to have fixed on the target size for its new Hestia Re Ltd. (Series 2026-1) catastrophe bond issuance, we are told, with now $335 million of fully-collateralized named storm reinsurance protection sought from the deal, while pricing has lowered again for some of the notes on offer.
Initially the company was targeting a $300 million source of protection for this new Hestia Re Ltd. 2026-1 deal.
But as we reported in our first update on this offering, Kin set a new target of between $325 million and $335 million of limit being sought.
We’re now told by sources that the size target for this issuance appears to have been fixed for $335 million of notes to be issued, so the upper end of the revised target size, which marks a clear signal that Kin is optimising the issuance for both size and price, with most tranches now pricing down for a second time.
Kin’s Bermuda based special purpose insurer (SPI) is offering four tranches of Series 2026-1 notes, that will be sold to investors and the proceeds used to collateralize reinsurance agreements between the SPI and ceding company.
The ceding entities are initially the Kin Interinsurance Network and the Kin Interinsurance Nexus Exchange. But, as we’ve explained in previous articles, Kin will be able to add additional covered cedents should it introduce further underwriting entities during the term of the cat bond.
All four tranches of Hestia Re 2026-1 cat bond notes will provide Kin with fully-collateralized named storm reinsurance, on an indemnity trigger and per-occurrence basis, across risk periods beginning from June.
Across the four tranches of Hestia Re 2026-1 cat bond notes, the largest component of coverage will be Florida named storm reinsurance, with one tranche aiming for broader coverage across a number of states excluding Florida.
A $100 million tranche of Hestia Re Series 2026-1 Class A notes would attach at $300 million of losses and exhaust at $400 million, giving them an initial attachment probability of 3.1% and an initial base expected loss of 2.86%. These notes were originally offered to cat bond investors with price guidance in a range from 8.25% to 9%, which then fell to 7.5% to 8.25%, and has now fallen further to a new range of 7% to 7.50%.
A $100 million tranche of Class B notes would attach at $200 million of losses and exhaust at $300 million, giving them an initial attachment probability of 6.06% and an initial base expected loss of 3.67%. Initially, these notes were offered to investors with price guidance in a range from 10% to 11%, which then fell to 9.5% to 10%, and has now fallen to a tighter spread of 9.25%-9.50%.
The Class C tranche of notes were originally $25 million in size and their target was first lifted to between $25 million and $35 million in size, but we’re now told are targeted at $35 million in size.
The Class C notes will only provide protection over a one year term and these are the zero coupon notes. The Class C notes protection would attach at $80 million of losses and exhaust at $175 million, giving them an initial attachment probability of 16.88% and an initial base expected loss of 13.09%. These notes were originally offered to cat bond investors with price guidance of between 74% and 75% of par, but were revised to a single figure of 74%, which is where they still remain, so the top of initial guidance.
And finally, what was originally a $75 million tranche of Class D notes, but then targeted to $100 million have now been fixed at $100 million in size, we are told.
The Class D notes would attach at $85 million of losses and exhaust at $185 million, giving them an initial attachment probability of 3.82% and an initial base expected loss of 2.27%. These notes were initially offered to cat bond investors with price guidance in a range from 6.25% to 7%, which was later revised to a range of 5.75% to 6.25%, and we’re now told has been fixed at the low-end of the revised range at 5.75%.
Kin Insurance has been adjusting both size and pricing of its latest catastrophe bond to capitalise on investor demand at this time.
As a reminder, you can read all about the Hestia Re Ltd. (Series 2026-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.
