Hestia Re Ltd. (Series 2026-1)

This will become the fourth Hestia Re Ltd. catastrophe bond to be sponsored by direct-to-consumer insurtech Kin Insurance and the fourth to be issued by its Bermuda special purpose vehicle Hestia Re.

With this new Hestia Re Ltd. Series 2026-1 catastrophe bond, Kin Insurance has expanded the coverage sought, with for the first time hurricane reinsurance protection sought for states outside of Florida.

Kin is seeking at least $300 million of fully-collateralized reinsurance from the capital markets to cover named storm and hurricane risks in Florida and a number of other states with this deal.

Hestia Re Ltd., Kin’s Bermuda-based special purpose insurer (SPI), is offering four tranches of Series 2026-1 notes, preliminarily targeting $300 million in size. The notes will be sold to investors and the proceeds used to collateralize reinsurance agreements between the SPI and ceding company.

The ceding entities are initially the Kin Interinsurance Network and the Kin Interinsurance Nexus Exchange, but Kin will be able to add additional covered cedents should it introduce further underwriting entities during the term of the cat bond. It’s the first time the reciprocal exchange has been named as a cedent from the start.

Across the four tranches of notes, the largest component of coverage will be Florida named storm reinsurance we understand, with one tranche aiming for broader coverage across a number of states excluding Florida. One tranche is also a single year, zero coupon set of notes that are riskier.

All four tranches of Hestia Re 2026-1 cat bond notes will provide Kin with fully-collateralized named storm reinsurance, on an indemnity trigger and per-occurrence basis, across risk periods beginning from June, sources said.

A currently $100 million of Hestia Re Series 2026-1 Class A tranche of notes will provide Florida named storm reinsurance across a three year term. The coverage would attach at $300 million of losses and exhaust at $400 million, we understand, giving them an initial attachment probability of 3.1% and an initial base expected loss of 2.86%, and they are being offered to cat bond investors with price guidance in a range from 8.25% to 9%, we are told.

A currently $100 million of Hestia Re Series 2026-1 Class B tranche of notes will also provide Florida named storm reinsurance across a three year term. The coverage would attach at $200 million of losses and exhaust at $300 million, giving them an initial attachment probability of 6.06% and an initial base expected loss of 3.67%, and they are being offered to cat bond investors with price guidance in a range from 10% to 11%, we understand.

A currently $25 million of Hestia Re Series 2026-1 Class C tranche of notes will also provide Florida named storm reinsurance but only over a one year term and these are the zero coupon notes. The coverage would attach at $80 million of losses and exhaust at $175 million, giving them an initial attachment probability of 16.88% and an initial base expected loss of 13.09%, and they are being offered to cat bond investors with price guidance of between 74% and 75% of par, sources explained.

The final currently $75 million of Hestia Re Series 2026-1 Class D tranche of notes will provide named storm reinsurance across a three year term for the states of Alabama, Georgia, Louisiana, Missouri, Mississippi, South Carolina, Tennessee, Texas and Virgina. Their coverage would attach at $85 million of losses and exhaust at $185 million, giving them an initial attachment probability of 3.82% and an initial base expected loss of 2.27%, and they are being offered to cat bond investors with price guidance in a range from 6.25% to 7%, we’ve learned.

Update 1:

We’ve learned that Kin is looking to slightly upsize its latest Hestia Re Series 2026-1 catastrophe bond issuance, while the price guidance has been adjusted downward in most cases.

The Class A notes remain $100 million, but with updated spread guidance at a lower level of 7.5% to 8.25%.

The Class B notes also remain $100 million, but with updated spread guidance at a lower level of 9.5% to 10%.

The Class C one-year notes are now targeted at between $25 million and $35 million, while their zero-coupon price has been updated at 74% of par, which is effectively the top-end of guidance.

The Class D tranche of notes have been upsized to a $100 million target, while their spread guidance has also fallen to a new range of 5.75% to 6.25%.

Update 2:

Kin has now fixed its target for the Hestia Re Series 2026-1 catastrophe bond issuance at $335 million, while the price guidance has been adjusted downward for a second time in most cases.

The Class A notes remain $100 million, but with updated spread guidance at a lower level of 7% to 7.5%.

The Class B notes also remain $100 million, but with updated spread guidance at a lower level of 9.25% to 9.5%.

The Class C one-year notes are now targeted at $35 million, while their zero-coupon price remains at 74% of par.

The Class D tranche of notes remain at $100 million, while their spread guidance has also fallen to the bottom of the revised range at 5.75%.

Update 3:

Kin secured the upsized target of $335 million of reinsurance from its new Hestia Re Series 2026-1 catastrophe bond issuance, while the notes priced below the initial guidance in most cases.

The Class A notes were finalised at $100 million and will pay investors an initial risk interest spread of 7%.

The Class B notes were also finalised at $100 million, with a risk interest spread of 9.25%.

The Class C one-year notes were finalised at $35 million, while their price remained at 74% of par.

The Class D tranche of notes were finalised at $100 million, with a risk interest spread of 5.75%.