Fish Pond Re Ltd. (Series 2026-1)

Texas Farm Bureau Insurance, the insurer arm of Texas’ largest farm organisation, a non-profit focused on its members from the agricultural community, has returned to the catastrophe bond market for its second sponsorship.

With this new Fish Pond Re 2026-1 catastrophe bond, it seems Texas Farm Bureau Insurance is looking to renew the protection that its soon to mature Fish Pond Re 2024-1 cat bond debut had provided.

For its second cat bond sponsorship, Texas Farm Bureau Insurance is again using its Bermuda based special purpose insurer (SPI), named Fish Pond Re Ltd.

Fish Pond Re Ltd. is targeting issuance of two tranches of Series 2026-1 catastrophe bond notes, that will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the vehicle and the Texas Farm Bureau Insurance subsidiaries.

As with the first Fish Pond Re cat bond, we’re told that the covered entities include Texas Farm Bureau Casualty Insurance Company, as well as mutual insurer subsidiaries of the Texas Farm Bureau.

The initial target is to secure $250 million of named storm reinsurance protection covering the state of Texas, on an indemnity trigger and per-occurrence basis. This time, the term of coverage being sought is longer, as a four year deal compared to the three year’s of coverage from the debut cat bond, with these new notes set to remain on-risk through to the end of 2030.

A currently $125 million tranche of Series 2026-1 Class A notes would attach their coverage at $825 million of losses and exhaust it at $1.425 billion, giving the notes an initial attachment probability of 0.4%, an initial expected loss of 0.26% and the initial spread price guidance is in a range from 2.25% to 2.75%, we understand.

A currently also $125 million tranche of Series 2026-1 Class B notes are riskier, in attaching their coverage at $325 million of losses and exhaust it at $825 million, giving the notes an initial attachment probability of 1.91%, an initial expected loss of 0.88% and they come with initial spread price guidance in a range from 3% to 3.5%, sources said.