Arthur Re Ltd. – Woody Re 2026-1

This is the first catastrophe bond that will benefit Syndicate 3123, a syndicate launched in 2024 to operate in the Lloyd’s market by the Fidelis Partnership alongside Pelagos Insurance Capital (formerly Fidelis Insurance).

It is the second catastrophe bond to 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.

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

These notes are designed to provide a source of fully-collateralized, multi-year and multi-peril retrocessional reinsurance from the capital markets, to protect Syndicate 3123, which is acting through its managing agent Asta Managing Agency.

The cat bond notes will provide the Fidelis Partnership linked Syndicate 3123 at Lloyd’s with a source of catastrophe reinsurance against losses from named storms, earthquakes, severe thunderstorms, winter storms and wildfire events, over a three year term to the end of June 2029, we are told.

The covered area differs across the perils, with all of them covering the 50 states of the US and DC, but named storms cover also being for Puerto Rico and the US Virgin Islands, the same for earthquake but including Canada as well, while severe thunderstorms, wildfires and winter storms are just covered across the US and DC.

The reinsurance protection from the Woody Re 2026-1 Class A catastrophe bond notes will cover Syndicate 3123 on an annual aggregate, industry loss index trigger basis, with franchise deductibles of $15 billion to be enforced for named storm and earthquake events, and $10 billion for the other covered perils.

The Woody re 2026-1 Class A notes have an initial attachment at $78 billion of aggregated industry losses and exhaustion is at $148 billion, which gives them an initial attachment probability of 7.13% and initial expected loss of 3.88%, sources said.

The currently $75 million of cat bond notes are being offered with price guidance for an initial risk interest spread of between 8.25% and 9%, we understand.

Update 1:

We’re told the target size of this Woody Re 2026-1 catastrophe bond remains unchanged at $75 million, but the price guidance has been lowered to the bottom-end of the initial range, at 8.25%.

Update 2:

The Woody Re 2026-1 catastrophe bond that Arthur Re Ltd. is set to issue has now been priced and finalised to provide $75 million of reinsurance protection to the Fidelis Partnership Syndicate 3123.

The $75 million of Class A notes priced at their revised lower risk interest spread of 8.25%.