The California Earthquake Authority (CEA) has raised the target size of its latest catastrophe bond sponsorship a second time, now seeking up to $425 million of fully-collateralized earthquake reinsurance protection from this Sutter Re Ltd. (Series 2026-1) issuance, Artemis can report.
The California Earthquake Authority (CEA) launched this new offering in early May and was originally targeting $300 million of fully-collateralized earthquake reinsurance from the capital markets with this new Sutter Re Series 2026-1 catastrophe bond.
As we then reported last week, the CEA was aiming to upsize this Sutter Re 2026-1 cat bond issuance with the target size increased by 33% and $400 million of protection being sought from the deal, while at the same time the price guidance was lowered.
Now, in a further update to the size and pricing of its new cat bond, the CEA has lifted the target size of the offering a second time, with now as much as $425 million of collateralized earthquake reinsurance limit the new target.
At the same time, the price guidance for each of the tranches of Sutter Re Series 2026-1 cat bond notes on offer has been lowered further, we understand.
Which means the CEA is now targeting as much as $425 million of limit across the two tranches of cat bond notes on offer, which will provide the insurer with a four year source of fully-collateralized California earthquake reinsurance protection on an indemnity trigger and annual aggregate basis.
What was at first a $200 million tranche of Series 2026-1 Class C notes were first lifted to $300 million in size, but have now been increased further with a new target for as much as $325 million of reinsurance limit.
The Class C notes comes with an initial expected loss of 2.30% and were first offered to cat bond investors with price guidance in a range from 4.25% to 5%. As we reported, this was first lowered to a revised range of 3.75% to 4.25%, but has now been lowered further to between 3.5% and 3.75%, sources said.
The second tranche of Series 2026-1 Class F notes remain at $100 million in size.
The Class F notes have that come with an initial expected loss of 4.05% and were first offered to cat bond investors with price guidance in a range from 6.5% to 7.25%. That was later reduced to a revised range of 5.75% to 6.5%, but we’re told has now been reduced further to between 5.5% and 5.75%.
The CEA is targeting strong price execution for its latest catastrophe bond deal, looking to capitalise on strong investor demand and abundant capital in the marketplace.
The California Earthquake Authority (CEA) is a very consistent sponsor of catastrophe bonds, with this marking the 24th cat bond sponsorship we have tracked from the firm.
View details of every catastrophe bond sponsored by the CEA in the Artemis Deal Directory.
You can read all about this new Sutter Re Ltd. (Series 2026-1) catastrophe bond from the California Earthquake Authority (CEA) and every other cat bond ever issued in the extensive Artemis Deal Directory.
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