Inigo has priced its second catastrophe bond of the year, securing the company a further $110 million of capital markets backed reinsurance protection.
A statement from the firm said Montoya Re II closed this week and is a $110m transaction covering North American named storms and earthquakes.
It responds on an industry loss and annual aggregate basis and will be on risk until the end of March 2026. The coupon is 14% above money market fund returns.
The bond was structured by Aon Securities and global reinsurer Hannover Re provided fronting services.
As with its first Montoya Re 2022-1 cat bond issued earlier in the year, Inigo Insurance is again seeking a capital markets backed source of multi-peril annual aggregate retro reinsurance protection with its new deal.
Sources indicate that this second Montoya Re catastrophe bond is a little narrower in its coverage, with the issuance just seeking North American, including Canada, named storm and earthquake protection for Inigo.
Montoya Re Ltd. will seek to issue a single tranche of Series 2022-2 Class A notes, with a target size of issuance of $100 million or greater, and these will be sold to investors and the proceeds used to collateralize reinsurance agreements between the SPI and Inigo’s Syndicate 1301.
Adam Alvarez, Head of Insight at Inigo, said, “We are very pleased to have sponsored our second catastrophe bond just nine months after the first. Montoya II will provide Inigo with a further $110m of peak zone protection at a turbulent time in the market – this will bring the total amount of outstanding cat bond limit to $225m.”
He added: “We continue to find that the risk appetite of ILS investors is complimentary to other providers of contingent capital. We were pleased to see that Montoya II attracted investment from both specialist ILS funds and more generalist investors. A rolling programme of issuance will further increase Inigo’s ability to support our clients throughout the cycle. We see these types of transaction as an integral part of the way that Inigo finances its business.”
The first catastrophe bond by Inigo, Montoya Re, was launched on 1 April and was a $115m transaction covering earthquake and windstorm risk in the US, Canada, and Japan. The risk period was set as three years with a coupon of 6.75% above money market fund returns.
For more information on catastrophe bonds, please visit our sister website Artemis.
