One of the tranches that was to be in the Sanders Re II Ltd. (Series 2019-1) catastrophe bond sponsored by Allstate Corp. will not be issued.

Pricing for the lower-risk layer of the offering may not be viable, insurance-linked securities blog Artemis reported. Allstate is reportedly looking for another source of reinsurance to replace the tranche.

The size of the remaining higher-risk layer is unchanged at $300 million; its pricing was moved to the top end of the initial guidance in the range of 11.25% to 12.25%. This tranche covers U.S. named storms, earthquakes, severe weather, fire and other perils, but will not cover any risks in Florida.

The notes would attach on an occurrence basis at $2.75 billion of losses and aggregate basis at $3.54 billion. The notes, which have an initial expected loss of just slightly under 1.57%, will cover a $400 million layer of the insurer's reinsurance tower.