We’ve learned that insurer USAA is aiming to upsize its latest catastrophe bond to supply $450 million of occurrence reinsurance protection, up from the initial $325 million goal, while at the identical time the worth guidance for notes from this latest Residential Reinsurance 2024 Limited (Series 2024-2) deal has tumbled.

Underscoring very attractive issuance conditions within the catastrophe bond market, USAA is the most recent that appears set to secure its latest cat bond coverage with pricing on the low-end of initial guidance, or below it.

It reflects a well-capitalised and money wealthy cat bond investor community presently, which helps to drive strong execution for sponsors.

Having returned to the market with a latest Residential Re 2024-2 catastrophe bond issuance recently, with an initial $325 million goal for the deal, we’ve now learned that the goal size has been increased to $450 million.

This latest Residential Re cat bond might be the forty fourth we have now tracked from USAA, with now 43 issuances under the Residential Re name and one named Espada Re all listed in our extensive Deal Directory.

Three tranches of notes are being issued by the Residential Reinsurance 2024 Limited structure positioned within the Cayman Islands, to supply USAA with multi-peril, per-occurrence and indemnity triggered reinsurance protection against losses from US peak and other perils across a 4 yr term.

A Class 2 tranche of notes was preliminarily sized at $50 million, but is now pitched to be $75 million in size, we’re told. The Class 2 notes include an initial expected lack of 6.14% and were first offered with price guidance of 14% to fifteen%, but we’re now told the updated guidance range is lower at 13.25% to 14%.

The second, Class 3 tranche of notes were preliminarily sized at $125 million, but at the moment are aiming for $200 million, we understand. These Class 3 notes could have an initial expected lack of 3.25% and were first offered with price guidance in a variety from 7.75% to eight.5%, but that too has been lowered to an updated range of seven% to 7.75%

The third and final Class 4 tranche of notes targeted $150 million to start, but at the moment are aimed to secure $175 million of reinsurance for USAA. These Class 4 notes have an initial expected lack of 2.05% and were initially offered with price guidance of 6% to six.5%, which has also tumbled to a latest and updated price range of 5.25% to six% being offered to investors, we understand.

It looks like this latest Residential Re cat bond issuance for USAA may very well be an example of very strong execution for the sponsor, reflecting strong cat bond fund and investor appetites, excess money out there needing to be deployed and the actual fact the cat bond market has come through recent hurricanes relatively unscathed.

Interestingly, at $450 million in size once settled this latest Residential Re 2024-2 deal would turn into the equal third-largest cat bond issuance ever sponsored by USAA.

You may read all about this latest Residential Reinsurance 2024 Limited (Series 2024-2) catastrophe bond from USAA and examine details on almost every other cat bond ever issued in our extensive Artemis Deal Directory.