Nakama Re Pte. Ltd. (Series 2026-1)

Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, has returned to the catastrophe bond market again, looking to secure more aggregate Japanese earthquake reinsurance protection from the capital markets through sponsorship of this Nakama Re Pte. Ltd. (Series 2026-1) transaction.

The initial target is to secure $100 million of fully-collateralized reinsurance from this new cat bond, we understand.

For the fourth time, Zenkyoren will use its Singapore domiciled special purpose reinsurance vehicle to issue its latest catastrophe bond transaction.

For this latest catastrophe bond for Zenkyoren, Singapore based SPRV Nakama Re Pte. Ltd. is targeting issuance of a single tranche of Series 2026-1 Class 1 notes, through which the goal is to raise at least $100 million in capital to collateralize a reinsurance agreement between the issuing vehicle and cedent Zenkyoren.

Similar to the last few Nakama Re cat bonds for Zenkyoren, the mutual insurer is again aiming to secure fully-collateralized Japanese earthquake reinsurance protection structured on a three-year aggregate, indemnity triggered basis.

Like those recent deals, the full term of coverage is set to run across five years, to mid-April 2031, across three annual aggregate risk periods, each three-years in length, that overlap across the full term.

We assume that Zenkyoren again seeks reinsurance protection that includes coverage for losses from Japanese earthquake shake and related perils, including tsunami’s, fire, flooding and sprinkler leakage, like its recent cat bonds.

The currently $100 million tranche of Series 2026-1 Class 1 notes that Nakama Re Pte. is offering will come with an initial attachment point at JPY 1.8 trillion of losses and cover a layer to JPY 2 trillion.

The notes will sit within a roughly JPY 200 billion layer of the Zenkyoren reinsurance tower and also feature an aggregate franchise deductible of JPY 270 billion, the same as all its recent cat bond deals.

With this, the Nakama Re Series 2026-1 Class 1 cat bond notes will have an initial annualised attachment probability of 0.87%, an initial annualised expected loss of 0.82% and we’re told they are being offered to cat bond investors with price guidance for a risk interest spread in a range from 1.9% to 2.4%.