Liberty Mutual gets $150m target for new Mystic Re cat bond


Liberty Mutual, the leading US insurer and global reinsurer, successfully secured the target of $150 million in guaranteed reinsurance protection with its new catastrophe bond transaction Mystic Re IV Ltd. (series 2023-1).

logo-liberty-mutual-insuranceLiberty Mutual returned to the catastrophe bond market with what will be its eighth transaction of Mystic cat bonds in late November.

Originally, the goal was $125 million in capital markets property catastrophe reinsurance coverage.

But the company raised its target last week for its latest cat bond deal and has now managed to secure that additional support from investors.

As a result, the now $150 million Mystic Re Catastrophe Bond 2023-1 will provide Liberty Mutual with guaranteed reinsurance protection, on an event and indemnity trigger basis, to provide reinsurance protection. additional against losses caused by named storms and earthquakes affecting the United States and Canada. and the Caribbean, for a three-year term.

Thus, Mystic Re IV Ltd. will issue and sell to catastrophe bond investors a single $150 million tranche of Series 2023-1 Class A Notes, with the proceeds used to collateralize the underlying reinsurance agreement between the SPI and Liberty Mutual.

The $150 million cat bonds have an initial attachment probability of 2.48%, an expected initial loss of 1.74% and were initially offered to investors with price indications included between 8.5% and 9.25%.

As the coupon was set at the upper end of this range, at 9.25%, this new Mystic Re IV catalytic bond will pay investors a market multiple of 5.3 times the underlying expected loss.

This is a significantly higher multiple paid than for Liberty Mutual’s catastrophe bond issuance in June 2021, but in line with other recent deals that came to market in Q4 2022.

Once this new cat bond is completed later this month, Liberty Mutual will have $750 million of catastrophe bonds outstanding that will provide the company with reinsurance in capital markets.

You can read all about this catastrophe bond Mystic Re IV Ltd. (series 2023-1) of Liberty Mutual and all other cat bonds issued in the Artemis Deal directory.

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