Allstates $200m Sanders Re 2017-2 To Price At Bottom Of Guidance

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Includes: ALL, GLRE, HVRRF, HVRRY, SSREF, SSREY, TPRE
by: Steve Evans

The latest catastrophe bond from U.S. primary insurance company Allstate (NYSE:ALL), the $200 million Sanders Re Ltd. (Series 2017-2) deal, is set to price at the bottom-end of initial coupon guidance making the reinsurance coverage the notes provide particularly efficient, Artemis understands.

Allstate returned to the catastrophe bond market just over a week ago, with a $200 million Sanders Re 2017-2 deal that targets reinsurance protection against losses from multiple perils in the state of Florida only, for its two subsidiaries Castle Key Insurance and Castle Key Indemnity, which both underwrite Floridian property insurance risks.

The cat bond will provide Allstate's subsidiaries with three years of reinsurance cover against losses due to named storms, earthquakes, severe thunderstorms, volcanic eruptions, meteorite impact and wildfires affecting the state of Florida. The deal is structured on an indemnity trigger and per-occurrence basis, with coverage able to cascade down the reinsurance tower.

At launch the $200 million of Class A notes were being offered to ILS investors with coupon guidance in a range from 3.25% to 3.75%.

Now, we're told the coupon price looks set to be fixed at the bottom end of that guide range, at 3.25%, making the reinsurance coverage provided by this Sanders Re 2017-2 cat bond particularly cost-effective for Allstate.

At this time there is no news of the transaction upsizing beyond the initial target of $200 million.

This Sanders Re Ltd. (Series 2017-2) cat bond transaction is scheduled to complete by the end of May.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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