Core Specialty has completed its $65 million multi-year Yosemite Re 144A catastrophe bond.
The firm said in a statement that this was the final element of Core Specialty’s Property reinsurance program for 2022. The 2022 Program attaches at $50 million and exhausts at $570 million. Core Specialty also said that the placement was not only Core Specialty’s first foray into the catastrophe bond market, but it also represents one of the only standalone E&S 144A catastrophe bond issuances to date.
Jeff Consolino, president and chief executive officer of Core Specialty, said, “The Yosemite Re transaction marks another important step for Core Specialty. The cat bond not only further optimizes our risk transfer program, it also diversifies our existing panel of reinsurance capital providers. We are thrilled to successfully complete this strategic transaction. We continue to build a market-leading property division and our robust reinsurance program will ultimately benefit our customers and distribution partners.”
According to the firm, its 2022 Program also includes:
- $495 million of capacity secured within Cat XOL program, an increase of $120 million over 2021 Cat XOL placement capacity
- $570 million exhaustion represents 250 Year AIR all perils return period for projected 9/30/22 portfolio
- Efficiently blends traditional, structured, ILS, and cat bond capacity
- Program supported by 26 reinsurers and an additional 16 supporters of the cat bond placement
- Inclusive of the 1/1/22 Quota Share and Per Risk placements, 34 reinsurers support the 2022 Program
- All reinsurers have an “A-” (Excellent) or better financial strength rating from A.M. Best and/or S&P or have posted collateral
- Cat XOL program augments the 1/1/22 Quota Share placement that provides additional Cat capacity (10.5% part of $305 million Occurrence Limit)
The news comes around six months after Core Specialty completed its merger with Lancer Insurance Group. The merger was announced back in April 2021, with Lancer expected to operate as a separately managed Division of Core Specialty, retaining the Lancer brand and management team.
GC Securities acted as lead structurer, sole bookrunner and sole initial purchaser for this new deal.