Talanx secures $100m parametric cat bond, as Maschpark Re notes price at low-end

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Talanx has now successfully secured the targeted $100 million of parametric earthquake protection from its debut catastrophe bond, as the $100 million of Maschpark Re Ltd. (Series 2024-1) notes have now been priced at the low-end of initial guidance.

Earlier this month, Talanx AG, the German insurance and reinsurance group, entered the catastrophe bond market with its debut transaction, seeking $100 million in parametric triggered, multi-year Latin America earthquake protection.

As we then reported, the size of the issuance was unchanged, but like many other recent catastrophe bond issues the price guidance was narrowed and lowered towards the bottom-end of the range.

Now, sources tell us that the Maschpark Re 2024-1 parametric cat bond notes have now been priced and Talanx has secured its debut cat bond priced at the low-end of the revised guidance range.

There has still been no change to the size of this debut catastrophe bond for Talanx, with the notes set to provide the company with $100 million of parametric earthquake reinsurance across parts of South America including Chile and areas of countries adjacent to it.

The focus of the parametric coverage that the Maschpark Re catastrophe bond will provide Talanx will be on Chile, particularly the Santiago region, but the parametric box construction extends into Peru, Bolivia, and Argentina, all neighbouring countries, so earthquakes occurring in those countries can also qualify under the terms of the notes and could activate the parametric coverage if severe enough.

Now that they have been priced it is confirmed that the Maschpark Re Ltd. Series 2024-1 Class A notes will provide Talanx with a $100 million source of capital markets backed earthquake reinsurance.

The coverage will run across a three-year term, from January 2025 through the end of 2027, is structured on a per-occurrence basis and utilises a parametric trigger arrangement.

The $100 million of Maschpark Re 2024-1 cat bond notes come with an initial expected loss of 0.92% and were first offered to cat bond investors with spread price guidance in a range from 3.5% to 4%.

As we later reported, the price guidance was narrowed at the lower-end of that initial range, with updated guidance of between 3.5% and 3.75% then offered.

Now, sources have told Artemis that the notes have been priced to pay cat bond investors a spread of 3.5%, so the bottom of the initial spread price guidance range.

Once again, this reflects elevated investor demand for new catastrophe bond issues and the recent strong execution of deals being seen in the marketplace this quarter, which is helping to drive the cat bond market to another record full-year.

For Talanx, being its debut catastrophe bond, this is a strong result, in bringing a less frequently seen risk to the catastrophe bond market.

The Maschpark Re deal also serves to demonstrate that parametric earthquake risk in Latin America is attractive to cat bond investors and that capital is available in the insurance-linked securities (ILS) market to support the reinsurance needs of those with exposure there.

You can read all about this new Maschpark Re Ltd. (Series 2024-1) catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory.

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