Bayou Re Ltd. (Series 2026-1)

Louisiana Citizens Property Insurance Corporation, a non-profit residential and commercial property insurer for those who cannot access private market insurance in the state, is back in the catastrophe bond market and looking to sponsor what will be its twelfth cat bond issuance.

Louisiana Citizens is again aiming to secure fully-collateralized, multi-year named storm reinsurance protection from the capital markets with this Bayou Re Series 2026-1 cat bond issuance.

This will be the fourth takedown of a catastrophe bond under the Bayou Re Ltd. special purpose insurer (SPI) in Bermuda, as Louisiana Citizens continues to expand its multi-year hurricane and named storm reinsurance protection with the support of global insurance-linked securities investors.

Bayou Re Ltd. is offering to investors a $150 million single Class A tranche of Series 2026-1 notes, with the proceeds from their sale set to be used to collateralize a reinsurance agreement between the SPI issuer and Louisiana Citizens.

These Bayou Re Series 2026-1 cat bond notes will protect Louisiana Citizens with a capital markets backed and collateralized source of reinsurance against named storm losses in the state, structured using an indemnity trigger and per-occurrence basis, across a three-year term to the end of April 2029, we are told.

The $150 million Class A tranche of notes would initially attach their coverage at $540 million of losses to Louisiana Citizens, with an exhaustion point at $1.05 billion, leaving plenty of room for the issuance to upsize if the sponsor chooses.

The Series 2026-1 Class A cat bond notes that Bayou Re Ltd. is offering come with an initial attachment probability of 3.58%, an initial base expected loss of 2.5% and are being offered to cat bond funds and investors with price guidance in a range from 6.75% to 7.25%, sources said.