Inigo Limited has issued a US$255 million catastrophe bond through Montoya Re Ltd., its fifth and largest issuance, to provide retrocessional reinsurance protection for peak perils.
It is the second Inigo-sponsored series to use multiple tranches, and it adds Australian earthquake coverage for the first time, the company said.
Syndicate 1301 at Lloyd’s remains the beneficiary of the coverage. The notes provide multi-year protection for US named storm and earthquake risk in the US, Canada and Australia, using PCS and PERILS industry loss index triggers, Inigo said.
The deal is structured in three tranches. Inigo said the Class A notes total US$175 million and provide annual aggregate protection with an initial attachment probability of 3.86% and an expected loss of 2.26%.
Inigo said the Class B notes total US$50 million and include Australian earthquake coverage, with an initial attachment probability of 8.59% and an expected loss of 7.19%. The Class C notes total US$30 million and provide second and subsequent event protection with an initial attachment probability of 2.8% and an expected loss of 2.38%, the company said.
Adam Alvarez (pictured above), Inigo’s head of capital and climate strategy, said the issuance was part of the company’s ongoing use of the catastrophe bond market.
“We are very pleased to have returned to the catastrophe bond market for the fifth consecutive year,” Alvarez said.
Alvarez said the company had expanded the size of the placement compared with prior years and extended the tenor to a little over four years. “At US$255 million, the transaction is more than double the size of any previous issuance and will be a cornerstone of our capital stack,” he said.
In an earlier deal, Inigo issued a catastrophe bond valued at US$100 million through Montoya Re Ltd. Inigo said that transaction was structured to cover North American named storms and earthquakes, using a PCS industry loss index trigger to determine payouts.
Inigo said the 2024 bond had a coupon rate set at 11.5% above money market fund returns. The bond was fronted by Hannover Re, with Syndicate 1301 at Lloyd’s as the beneficiary, as part of its approach to managing catastrophe exposure.
