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Report: Citizens Property Insurance to sponsor $250M cat bond

Florida-based Citizens Property Insurance Corp. is returning to the catastrophe bond market with a $250 million Everglades Re II Ltd. series 2017-1 deal, Artemis reported.

The cat bond will provide Citizens with fully collateralized reinsurance protection for Florida named storm risks, covering tropical storms and hurricanes, on an annual aggregate basis using an indemnity trigger across a three-year term.

Everglades Re II will issue a single tranche of series 2017-1 class A notes sized at $250 million. The notes will have an initial attachment point of $2.15 billion of losses and an exhaustion point of $3.03 billion. The initial attachment probability for the notes is 2.49% and the expected loss is 1.95%. The initial coupon guidance range for the cat bond is 5% to 5.75%.

Citigroup is acting as the sole structuring agent and book runner for the bond, while Bank of America Merrill Lynch is a joint book runner. AIR Worldwide is providing risk modeling for the cat bond.