Gateway Re Ltd. (Series 2025-2)

This Gateway Re Ltd. Series 2025-2 catastrophe bond issuance is set to be the tenth in the Gateway Re cat bond series, which protect a range of underwriting entities owned by or linked to coastal property managing general underwriter (MGU) SageSure.

Initially, this Gateway Re 2025-2 catastrophe bond will provide named storm reinsurance protection, on a multi-year and fully-collateralized basis, to the Auros Reciprocal Insurance Exchange and Elevate Reciprocal Exchange.

Using the Gateway Re Ltd. Bermuda domiciled special purpose insurer (SPI), a single tranche of Series 2025-1 Class A notes will be offered for sale to catastrophe bond funds and investors, with the proceeds set to be used to collateralize a reinsurance agreements between the SPI and the named ceding entities which are to begin the Auros Reciprocal Insurance Exchange and Elevate Reciprocal Exchange.

It’s apparent that Elevate had purchased its own reinsurance tower in recent years, but for the upcoming mid-year renewals Elevate and Aurous will have a combined reinsurance tower, of which this catastrophe bond cover will become a component.

We understand that SageSure can opt to add other subsidiaries as beneficiaries of the coverage in future, including entities that sit under Slaine Insurance Holdings, LLC, Novel Financial Holdings, LLC, or SafeChoice Insurance Company.

The notes will provide their US named storm reinsurance to the SageSure underwriting entities on an indemnity trigger and per-occurrence basis across a three year term, from July 2025 to the end of June 2028, we understand.

The covered area will initially be the states of Louisiana, Mississippi, South Carolina and Texas, but at a reset in future additional states can be added, including Alabama, New York and North Carolina should the ceding company elect to.

The currently $125 million of Series 2025-2 Class A notes would attach their coverage at $250 million of losses, exhausting it at $500 million we understand.

This gives the notes an initial attachment probability of 3.11%, an initial expected loss of 1.86% and we are told the price guidance they are offered with is in a range from 6.75% to 7.5%.

Update 1:

We understand the target size for this Gateway Re 2025-2 catastrophe bond has been lifted to as much as $150 million.

At the same time the price guidance for the notes has narrowed, to an updated range of 7% to 7.25%, so within the initial guidance.

Update 2:

SageSure eventually secured this new Gateway Re 2025-2 catastrophe bond to provide the upsized $150 million of reinsurance for the Aurous and Elevate reciprocal exchanges.

The notes were finalised and priced to pay investors a spread of 7% we are told, so within the lower-half of the initial price guidance range.