Harbor Crest Re Ltd. (Series 2026-1)

This is a debut catastrophe bond from Porch Group, as the company looks to tap the capital markets for reinsurance for its homeowners underwriting entities.

Harbor Crest Re Ltd. has been established in Bermuda, to be licensed as a special purpose insurer (SPI) for issuing catastrophe bonds for Porch Group, we are told.

For this first issuance, Harbor Crest Re Ltd. is offering a single $100 million tranche of Series 2026-1 Class A notes to investors.

The notes will be sold and the proceeds from that sale will be used to fully-collateralize a reinsurance agreement between the SPI Harbor Crest Re and the beneficiaries of the protection, Porch’s main homeowners insurance underwriting entities Porch Insurance Reciprocal Exchange and Homeowners of America Insurance Company.

We understand that the $100 million tranche of Series 2026-1 Class A notes are designed to provide Porch’s underwriting entities with a roughly four-year source of collateralized and multi-peril reinsurance protection.

The notes will be exposed to losses from named storms, winter storms, severe weather events, wildfire and fire-following earthquake events, sources said.

The protection has been structured on a per-occurrence and indemnity trigger basis, while it spans the 50 states of the US and D.C.

The Harbor Crest Re Series 2026-1 Class A notes will have an attachment point at $365 million of losses and exhaust their coverage at $465 million, which suggests they may not upsize (although the layer can be adjusted if sponsors so choose).

The Class A notes come with an initial attachment probability of 2.42%, an initial base expected loss of 1.97% and price guidance is for a spread in a range from 5% to 5.75%, we understand.