Brookfield gets debut $100m Aragonite Re cat bond priced below guidance

Brookfield Corporation, the alternative investment manager and multinational from Canada, has now finalised its debut $100 million Aragonite Re Ltd. (Series 2024-1) catastrophe bond, securing the capital markets backed property insurance coverage priced below the initial guidance.

brookfield-logoBrookfield Corporation entered the catastrophe bond market for the first time in March, aiming to secure $100 million in property catastrophe insurance from capital market investors in the insurance-linked securities (ILS) market  for its Brookfield Property Group arm and related entities.

We’re now told that the deal has been priced, with Brookfield securing its targeted $100 million of protection, priced at a level roughly 14% below the initial guidance mid-point.

Through this Aragonite Re 2024-1 catastrophe bond, Brookfield will benefit from a $100 million multi-year source of North American named storm and earthquake insurance protection, offering per-occurrence and indemnity trigger protection across the US and Canada, running across three annual risk periods to March 30th 2027.

So, Bermuda based issuer Aragonite Re Ltd. will now issue $100 million of Series 2024-1 Class A notes, that will be sold to investors and the proceeds used to collateralize a reinsurance agreement with Obsidian Mutual IC, which is a protected cell of Brookfield’s Vermont based captive insurer Slate Management LLC.

That catastrophe protection will then cascade down as insurance to the Brookfield Property Group, covering all of Brookfield’s real estate and property investments.

The $100 million of Class A notes come with an initial expected loss of 0.59%. They were initially offered to cat bond investors with spread price guidance in a range from 5.75% to 6.50%, which as we reported was first lowered to a new range of 5.5% to 5.75%

As we reported this morning, the price guidance for these notes was reduced again, to a range of 5.25% to 5.5%.

Now, we’ve learned that the $100 million of Series 2024-1 notes that Aragonite Re will issue for Brookfield have been priced to pay investors a spread of 5.25%, so the bottom of the reduced range.

As noted, that pricing is just over 14% below the initial mid-point of price guidance, indicating a strong execution for Brookfield’s first property cat bond deal.

You can read all about this new Aragonite Re Ltd. (Series 2024-1) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.

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