Mountain Re Ltd. (Series 2026-1)

Spinnaker Insurance Company, the personal and commercial lines program and fronting specialist that was acquired by insurtech Hippo in 2020, has returned to the catastrophe bond market to sponsor its second issuance of a takedown under Mountain Re Ltd.

The sponsors first cat bond was issued in 2023 and is soon to mature, so Spinnaker is returning to renew and expand on that capital markets backed source of property catastrophe reinsurance.

Spinnaker is again using its Bermuda based special purpose insurer (SPI) Mountain Re Ltd. to issue its second catastrophe bond.

Mountain Re Ltd. is offering a single Series 2026-1 tranche of Class A notes, that will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the issuer and Spinnaker Insurance Company, we understand.

The initial target is for an issuance of $100 million in size or greater.

The Mountain Re Series 2026-1 Class A cat bond notes will provide Spinnaker with a capital markets backed source of reinsurance against losses from a range of US perils, being US named storm, earthquake, severe thunderstorm, winter storm and fire.

As we said, this second Mountain Re cat bond sees Spinnaker looking to expand on its cat bond coverage, with the introduction of the fire peril for the first time, which we understand is largely wildfire risk and located in California.

We’re told that the notes are most exposed to wildfires on an expected loss contribution basis, with named storm being the next largest contributing peril.

The Mountain Re 2026-1 catastrophe bond will provide Spinnaker Insurance with reinsurance on a per-occurrence and indemnity trigger basis over a three-year term, to June 7th 2029.

The currently $100 million of Mountain Re Series 2026-1 Class A cat bond notes would attach their coverage at $125 million in losses, covering a share of a layer up to $250 million we are told. As ever, there could be reinsurance layers that inure to this coverage.

The Class A notes will have an initial attachment probability of 4.54%, an initial base expected loss of 2.46% and are being offered to investors with spread price guidance in a range from 7.75% to 8.5%, sources said.