Herbie Re Ltd. (Series 2026-1)

Fidelis Insurance is back in the catastrophe bond market to sponsor what will become the eighth Herbie Re cat bond in the series, as the company looks to further expand its capital markets backed sources of industry-loss based retrocessional reinsurance.

With this eighth Herbie Re catastrophe bond, Fidelis Insurance is seeking retrocessional protection against losses from earthquakes affecting the United States.

Once again using its Bermuda-based special purpose insurer Herbie Re Ltd., Fidelis is targeting $75 million or greater in fully-collateralized retrocessional protection from the capital markets through the issuance and sale to investors of a single tranche of Series 2026-1 cat bond notes, we are told.

The notes will be sold to catastrophe bond funds and investors, with the proceeds set to be used to collateralize a retrocessional reinsurance agreement between the SPI, Herbie Re Ltd., and the ceding company, which is Fidelis Insurance Bermuda, the same entity as in all the other cat bonds under the Herbie Re program of deals.

The $75 million or more in Herbie Re Series 2026-1 Class A notes will provide Fidelis with a source of annual aggregate retrocessional reinsurance protection over an almost four year term to the end of 2029, we understand.

The notes will provide Fidelis with annual aggregate, industry-loss triggered protection against losses from earthquakes affecting the United States and District of Columbia.

There will be a $5 billion of industry losses franchise deductible for an event to qualify for aggregation, while the Herbie Re Series 2026-1 Class A cat bond notes would attach their coverage from $20 billion and exhaust at $40 billion, sources said.

As a result, the $75 million of Class A notes will have an initial attachment probability of 3.32% and an initial expected loss of 2.37%, while theyare being offered to investors with price guidance in a range from 4% to 4.75%, we’ve learned.