Aquila Re I Ltd. (Series 2026-1)

Nationwide Mutual Insurance has returned to the catastrophe bond market for what will become the eleventh cat bond from the sponsor we have seen and the third under its Aquila I Re Ltd. issuance structure.

U.S. primary insurer Nationwide Mutual Insurance Company is seeking at least $200 million in multi-peril reinsurance protection from the catastrophe bond market through this Aquila I Re Ltd. Series 2026-1 deal.

Nationwide Mutual is again seeking very similar coverage to its last cat bond sponsorship, we understand, with a target to secure $200 million of multi-peril and multi-year indemnity triggered and per-occurrence based reinsurance protection from this new transaction.

Aquila Re I Ltd. is aiming to issue two tranches of Series 2026-1 notes, that will be sold to investors and the proceeds used to collateralize reinsurance agreements with Nationwide.

The $200 million or more in reinsurance from this new Aquila Re I Series 2026-1 cat bond will protect Nationwide Mutual against losses from the perils of US named storm, earthquake, severe thunderstorm, winter storm, wildfire, meteorite impact, volcanic eruption, the same range of perils as its previous two cat bonds under the structure.

The protection from the Aquila Re I Series 2026-1 cat bond notes will run across a four-year term, from June 2026 to the end of May 2030, we understand.

Notably, Nationwide’s last two cat bonds only featured three-year terms of coverage. So this latest issuance sees the insurer looking to extend the capital markets backed protection for a longer term.

Aquila Re I Ltd. is offering a $100 million Series 2026-1 Class A-1 tranche of notes that would attach their coverage at $750 million of losses after stated reinsurance, exhausting at $1.15 billion, giving them an initial attachment probability of 0.64%.

The $100 million of Class A-1 notes come with an initial base expected loss of 0.52% and are being offered to cat bond investors with price guidance in a range from 4% to 4.75%, sources said.

A second also $100 million Class B-1 tranche of notes would attach their coverage at $1 billion of losses but have no stated reinsurance we understand and so are actually a riskier layer, exhausting at $1.95 billion, giving them an initial attachment probability of 2.44%.

The $100 million of Class B-1 notes come with an initial base expected loss of 1.24% and are being offered to cat bond investors with price guidance in a range from 4.75% to 5.5%, we are told.

We understand these new Series 2026-1 notes from Aquila Re I will sit alongside Nationwide’s other in-force cat bond from 2024 for this coming year.