Allstate launches $250m cat bond
US insurer Allstate has launched a new catastrophe bond. The deal’s initial size has been marked up as $250m but speculation is already mounting around by how much it could increase in size given the appetite of capital markets investors at the moment and Allstate’s large appetite for such coverage.
Sanders Re (Series 2013-1) will be the insurer’s third bond of this type following two Willow Re cat bond deals in 2007 and 2008.
The bond was widely expected after the insurer restructured its catastrophe reinsurance programme to allow it to tap into increasingly cost-effective capital market solutions.
Sanders Re is a Bermuda domiciled company that will secure Allstate a source of fully-collateralized reinsurance protection covering US hurricane and earthquake risks for four years.
Rating agency Standard & Poor’s has assigned a rating of BB+ to the Series 2013-1 class A notes and BB to the Series 2013-1 class B catastrophe bond notes.
