Arthur Re Ltd. – Quercian Re 2026-1

This is the first catastrophe bond that will benefit Oak Reinsurance Syndicate 2843, a syndicate focused on reinsurance opportunities that is operated by specialist underwriter in the Lloyd’s market Oak Global.

The offering is being issued by Arthur Re Ltd., which we understand to be an Artex Risk Solutions managed structure that is designed to make accessing the 144A catastrophe bond market more efficient for clients with a focus on index-triggered transactions.

Arthur Re Ltd. is a Bermuda domiciled unrestricted special purpose insurer (SPI), so is able to transact with multiple cedants and can issue insurance-linked securities (ILS) in multiple formats, including 144A catastrophe bond notes such as this deal.

Arthur Re Ltd. is offering an initially $75 million tranche of notes on behalf of its segregated account named Quercian Re 2026-1, we understand.

These notes are designed to provide a source of fully-collateralized, multi-year and multi-peril retrocession from the capital markets, to provide a source of protection to Syndicate 2843, which is acting through its managing agent Polo Managing Agency.

The cat bond notes will provide the Oak linked Syndicate 2843 at Lloyd’s with a source of retrocessional reinsurance against losses from US and Canada named storms and earthquakes, as well as US wildfire events, over a three year term to the end of May 2029, we are told.

While the Oak Reinsurance Syndicate 2843 is said to be the ceding company to this cat bond, it is possible that the protection will benefit broader Oak Global portfolios as well.

The protection from the currently $75 million of Quercian Re 2026-1 catastrophe bond notes that Arthur Re Ltd. is issuing will be structured on an annual aggregate and industry loss trigger basis, sources said.

The $75 million of Quercian Re 2026-1 cat bond notes will feature a $15 million franchise deductible, while their attachment point is said to be at $240 million of aggregate losses and exhaustion at $365 million.

Which gives the notes an initial attachment probability of 4.6%, an initial expected loss of 3.29% and they are being offered to investors with price guidance for a spread of between 7.25% and 8%.

Update 1:

We’re told that Oak Global is now aiming to upsize its first catastrophe bond sponsorship, perhaps by as much as 100%.

This issuance of Quercian Re 2026-1 catastrophe bond notes is now targeted at between $125 million and $150 million in size. Should it achieve that upper-end it seems that the exhaustion point for the coverage would be raised commensurately.

The price guidance of the notes has now been lowered to a revised range of 7% to 7.5%.

Update 2:

Oak Global has now successfully priced and secured its debut catastrophe bond sponsorship, upsizing the offering by 100% from its initial launch to secure $150 million of retrocessional reinsurance from the capital markets.

The single tranche of Quercian Re 2026-1 catastrophe bond notes are $150 million in size and they priced to pay investors an initial risk interest spread of 7%, so below the initial guidance range.