Arthur Re Ltd. – Tranquil Re 2026-1

This is the first catastrophe bond that has come to market designed to benefit and provide retrocessional reinsurance to support reinsurer Nectaris Re Ltd.

Nectaris Re Ltd. is a Class 3A Bermuda-based rated reinsurance platform, which is backed by funds under the management of and advised by specialist insurance linked securities (ILS) and reinsurance investment manager Leadenhall Capital Partners.

It is the third catastrophe bond to to come to market and be issued using the Arthur Re Ltd. platform, which is Gallagher Re’s structure that has been designed to make issuing index trigger cat bonds more cost effective and efficient.

For this issuance, Arthur Re Ltd. is offering an initially $60 million tranche of Class A notes to investors on behalf of its segregated account named Tranquil Re 2026-1.

The notes are designed to provide Nectaris Re Ltd. with a multi-year source of fully-collateralized multi-peril US peak peril retrocessional reinsurance from the capital markets.

The cat bond notes will provide Nectaris Re with a source of catastrophe protection against losses from US named storms and earthquakes, over a roughly two year term to the end of June 2028, sources have said.

The reinsurance protection from the Tranquil Re 2026-1 Class A catastrophe bond notes will cover Nectaris Re on a per-occurrence and industry loss index trigger basis.

We’re told that the Tranquil Re 2026-1 Class A notes will have an initial attachment at $60 billion of industry losses and exhaust their coverage at $100 billion, which gives them an initial attachment probability of 10.23% and initial expected loss of 7.19%.

The currently $60 million of Tranquil Re 2026-1 cat bond notes are being offered to investors with price guidance for an initial risk interest spread of between 12% and 12.75%, we understand.