Mangrove Property Insurance has successfully secured an upsized $111 million of named storm reinsurance protection from its debut Buttonwood Re Ltd. (Series 2026-1) catastrophe bond sponsorship, with all four tranches of notes pricing for spreads at the bottom ends of initial guidance or lower, Artemis can report.
Initially, Mangrove was targeting $100 million of reinsurance across issuance of four tranches of Series 2026-1 cat bond notes by Buttonwood Re when this deal was first offered to investors in late April.
We then reported in our first update on this transaction that Mangrove raised the target size for this Buttonwood Re Series 2026-1 cat bond sponsorship to 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, lower in all cases.
In a second update we reported that Mangrove was still targeting to upsize its first cat bond sponsorship to as much as $111 million, while the price guidance had been lowered or adjusted again for each of the tranches of notes.
Now, we’re told the notes have been priced and so Mangrove has successfully secured the upsized cat bond, with pricing finalised at attractive levels compared to guidance in every case.
With this, Mangrove has now secured a $111 million source of capital markets backed reinsurance from its first venture into the catastrophe bond market, securing $75 million of occurrence protection and $36 million of annual aggregate protection, all against losses from named storms and hurricanes in the state of Florida.
The first three tranches of Series 2026-1 notes on offer are set to provide indemnity and per-occurrence reinsurance for Mangrove, while the fourth tranche will provide a source of indemnity triggered annual aggregate protection, each covering named storm losses and set to run across a three-year term.
A $25 million tranche of Series 2026-1 Class A per-occurrence notes come with an 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 lowered to between 5% and 5.5%. We’re now told the notes priced to pay investors an initial risk interest spread of 5%, so at the lowest-end of reduced guidance.
A $25 million tranche of Series 2026-1 Class B per-occurrence notes come with an initial base expected loss of 1.71%. These notes were originally offered to cat bond investors with price guidance in a range from 6.5% to 7.25%, which was later updated to a tighter spread of 6.5% to 7%, and have now priced to pay investors a spread of 6.5%, so the low-end of initial guidance.
A $25 million tranche of Series 2026-1 Class C per-occurrence notes have an initial base expected loss of 2.59%. These were initially offered to cat bond investors with spread price guidance in a range from 8% to 8.75%, which later narrowed to from 8% to 8.25% and we now understand have been priced to pay investors 8%, again the low-end of initial spread guidance.
The final tranche of Series 2026-1 Class D notes were upsized from their initial $25 million to $36 million in size and will provide the annual aggregate reinsurance protection to Mangrove. These notes have an initial base expected loss of 0.13%, were first offered to cat bond investors with spread price guidance in a range from 6.5% to 7.25%, which fell to between 6% and 6.5%, and again to a revised range of 5.5% and 6%. The aggregate notes have priced to pay investors a spread of 6%, so below the initial range on offer.
Which indicates a very strong result for a first-time catastrophe bond sponsor and Mangrove Property Insurance will undoubtedly be delighted with the reception the investor base gave its first cat bond offering.
Given Mangrove’s growth over its first year or so of operations, it’s likely we’ll see more from this new Florida headquartered catastrophe bond sponsor in year’s to come.
You can read all about this new Buttonwood Re Ltd. (Series 2026-1) catastrophe bond and view details of more than 1,250 other cat bond issuances in the extensive Artemis Deal Directory.
