Chartwell Re Ltd. (Series 2026-1)

This will be the second Rule 144A catastrophe bond issuance to be sponsored for the benefit of coastal specialist insurers U.S. Coastal Insurance Company and U.S. Coastal Property & Casualty Insurance Company.

These two insurers are administered by hurricane exposed property insurance specialist Cabrillo Coastal General Insurance Agency, part of Cabrillo Holdings, LLC, with Cabrillo’s owners the major stakeholders in the companies.

The sponsoring insurers are New York domiciled US Coastal Insurance Company and Florida domiciled US Coastal Property & Casualty Insurance Company, both operating as homeowners insurance specialists.

Following on from their debut catastrophe bond a year ago, the US Coastal insurers are utilising Chartwell Re Ltd., as they look to expand on their capital markets backed reinsurance from the 144A cat bond market.

For this second issuance, Chartwell Re Ltd. is offering two tranches of Series 2026-1 cat bond notes to investors, with an initial target to secure $100 million of fully-collateralized reinsurance for the US Coastal insurers, we understand from sources.

The Chartwell Re Series 2026-1 cat bond notes will provide catastrophe reinsurance to the two US Coastal insurers sponsoring the deal, on an indemnity trigger and per-occurrence basis, over a three year term and covering named storm losses.

The covered area are the same hurricane exposed states as the first cat bond, the main states the two insurers underwrite business in, which are: Alabama, Florida, Mississippi, New Jersey, New York, Rhode Island, and Texas.

We understand that New York and Florida are the states making the main contribution to the notes expected loss.

We’re told that these two new Series 2026-1 cat bond tranches from Chartwell Re will sit in a stack in the reinsurance tower with the three Series 2025-1 tranches issued a year ago, with the notes reinsurance protection inuring to each other as you move up the stack.

Chartwell Re is offering an initially $55 million tranche of Series 2026-1 Class D notes that will have an initial attachment point at $65 million and exhaust at $120 million, giving them an initial attachment probability of 1.5%, an initial expected loss of 1.32%, while they are being offered to investors with price guidance in a range from 4.75% to 5.5%.

A $45 million tranche of Series 2026-1 Class E notes are also being offered, that will also have an initial attachment point at $65 million and exhaust at $120 million, giving them an initial attachment probability of 7%, an initial expected loss of 5.67%, while they are being offered to investors with price guidance in a range from 12.5% to 13.25%.

We’re told that the Class D notes are set to be the highest layer in the reinsurance tower, while the Class E notes will be the lowest or riskiest, and the three tranches from 2025 will sit between them, each on top of the other.