Mayflower Re Ltd. (Series 2026-1)

The Massachusetts Property Insurance Underwriting Association (MPIUA), a residual market property insurance association or FAIR Plan for the Commonwealth of Massachusetts, is back in the catastrophe bond market to sponsor what will become its seventh issuance.

The MPIUA is again using its Bermuda-based vehicle Mayflower Re Ltd. for this 2026 catastrophe bond.

We understand from sources that the issuance will feature two tranches of Class A Series 2026-1 notes that will be sold to investors and together initially target $150 million of aggregate catastrophe reinsurance protection for the MPIUA.

The proceeds from their sale will be used to collateralize a retrocessional reinsurance agreement with global reinsurer Hannover Re, which is acting as the fronting risk transformer for this cat bond and has for other recent MPIUA sponsored deals, in turn providing the catastrophe reinsurance to the sponsor.

This Mayflower Re Series 2026-1 cat bond issuance will provide the MPIUA with a multi-year source of indemnity based and annual aggregate reinsurance over a three-year term and three annual risk periods, running until the end of June 2029, we have learned.

The Series 2026-1 Class A and Class B notes will provide the MPIUA with reinsurance against certain losses from Massachusetts named storms, severe thunderstorms and winter storms, the same range of perils covered by its previous cat bonds.

Also like prior issuances for the MPIUA, an event must breach a $10 million ultimate net loss deductible to qualify for aggregation under the terms of the reinsurance.

A currently $75 million Series 2026-1 Class A tranche of notes will initially cover losses from an attachment point of $850 million, exhausting at $1.3 billion of losses to the MPIUA risk pool.

Which gives the Mayflower Re Series 2026-1 Class A notes an initial attachment probability of 2.196%, an initial base expected loss of 1.788% and they are being marketed to investors with spread price guidance in a range from 4% to 4.5%.

An also currently $75 million Series 2026-1 Class B tranche of notes are riskier, sitting lower down under the A’s, and will initially cover losses from an attachment point of $550 million, exhausting at $850 million of losses to the MPIUA risk pool.

Which gives the Mayflower Re Series 2026-1 Class B notes an initial attachment probability of 3.079%, an initial base expected loss of 2.598% and they are being marketed to investors with spread price guidance in a range from 4.75% to 5.25%.