SCOR targets $75m Atlas Capital 2023-1 multi-peril retro cat bond
France headquartered global reinsurance company SCOR has returned to the catastrophe bond market to boost its retrocession arrangements, targeting at least $75 million of multi-peril protection from an Atlas Capital DAC (Series 2023-1) issuance.
For SCOR, this will be its seventeenth cat bond under an Atlas name, since sponsoring its first right back in the year 2000.
The reinsurer has been a regular user of catastrophe bonds within its retrocessional reinsurance program, alongside other forms of traditional and capital markets capacity.
The reinsurers’ $250 million Atlas Capital UK 2019 PLC (Series 2019-1) cat bond deal, is scheduled for maturity in the coming weeks, so this new issuance will at least partly renew that expiring retrocessional reinsurance protection for SCOR.
For this new 2023 cat bond, SCOR has established a new Ireland based designated activity company named Atlas Capital DAC, we are told.
Atlas Capital DAC will look to issue a single tranche of Series 2023-1 Class A notes that will be sold to investors and the proceeds used to collateralize a retrocessional reinsurance agreement between the vehicle and SCOR SE.
The issuance is preliminarily sized at $75 million we understand, but with SCOR’s maturing 2019 cat bond having provided it $250 million of retrocession, there is every chance this new Atlas Capital 2023 cat bond gets upsized, if the investor support is sufficient.
This Atlas Capital DAC 2023-1 catastrophe bond will provide SCOR with a source of annual aggregate and weighted industry loss trigger based retro reinsurance protection, over a roughly three year term to the end of May 2026, sources told us.
The covered perils and regions are said to be US named storm and earthquake risks, Canada earthquakes and European windstorm industry-loss events.
The single tranche of Series 2023-1 cat bond notes that Atlas Capital DAC will issue come with an initial attachment probability of 2.39%, an initial base expected loss of 2.1% and are being marketed to cat bond funds and investors with spread price guidance in a range from 8.25% to 9.25%, we understand.
SCOR sponsored its last industry-loss trigger and annual aggregate based cat bond a year ago, with that Atlas Capital Re 2022 deal having an initial expected loss of 3.17% and pricing to pay investors a coupon of 9.5%.
So, this new 2023 Atlas cat bond would have a higher multiple-at-market at the mid-point of its pricing, reflecting the hardening of retro rates that has occurred in the last year.
Finally, we’re told that this new Atlas Capital 2023 cat bond from SCOR has, like its 2022 issuance, considered ESG factors to assist investors in performing their due-diligence on the deal.
By providing ESG related disclosures, SCOR is meeting investor demand for such additional information, that can help them in determining their level of support for a sponsor.
You can read all about this Atlas Capital DAC (Series 2023-1) catastrophe bond from SCOR and every other cat bond transaction in the Artemis Deal Directory.