Golden Bear Re Ltd. (Series 2026-2)

The California FAIR Plan Association has returned to the catastrophe bond market for is second issuance, seeking $200 million or more in capital markets backed wildfire reinsurance through this Golden Bear Re Ltd. (Series 2026-2) cat bond issuance.

The California FAIR Plan was established by statute as an insurer of last resort to ensure that all California property owners are able to gain access to basic fire insurance when coverage in the traditional market is not available.

The FAIR Plan is again using its Bermuda based special purpose insurer Golden Bear Re Ltd. to issues these catastrophe bond notes.

For this second deal, Golden Bear Re Ltd. is targeting issuance of a single tranche of Series 2026-1 Class A notes, that will be sold to cat bond investors and the proceeds used to collateralize a reinsurance agreement with the California FAIR Plan.

The initial target is to secure $200 million of protection against California wildfire losses on an indemnity trigger and per-occurrence basis with this second Golden Bear Re catastrophe bond issuance, sources told us.

The Golden Bear Re 2026-2 cat bond notes will provide the FAIR Plan with fully-collateralized wildfire reinsurance for the state of California running across a three year term to the end of February 2029, so a three year deal, we understand.

The currently $200 million of Golden Bear Re Series 2026-2 Class A notes would attach their coverage at $5 billion of losses, sharing in a layer running to $6 billion, so will sit directly beneath the reinsurance protection provided by its debut cat bond issuance.

The Series 2026-2 Class A notes will come with an initial attachment probability of 3.07%, an initial expected loss of 2.65% and are being offered to investors with spread price guidance in a range from 9.75% to 10.75%, we are told.

We’re told these notes, like the first Golden Bear Re cat bond, again come with certain provisions for a longer subrogation related extension, allowing for time for any beneficial claims to be realised.