Nature Coast Re Ltd. (Series 2026-2)

SafePoint Insurance Company, the US primary insurance group, has returned to the catastrophe bond market looking to sponsor its sixth cat bond under the Nature Coast Re special purpose insurer, which will become its tenth cat bond sponsorship in total.

Nature Coast Re Ltd. is offering investors two tranches of Series 2026-2 catastrophe bond notes that will be sold to investors to provide the collateral to fully-support underlying reinsurance agreements.

Like other recent cat bonds from the company, the reinsurance agreements will protect SafePoint Insurance Company itself and the two reciprocal exchanges it operates, the Louisiana focused Cajun Underwriters Reciprocal Exchange entity, and the Florida homeowner and business owner focused Manatee Insurance Exchange.

As we said, this new cat bond is designed to cover the widest range of US states of any cat bond in SafePoint’s history, as the insurer continues to expand and grow into new locations.

Both tranches of the Nature Coast Re 2026-2 cat bond issuance are designed to provide SafePoint and its reciprocal underwriting entities with a source of fully-collateralized reinsurance protection covering losses from named storms across the states of Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas.

Both tranches of notes from this cat bond are structured to provide protection to SafePoint’s underwriting entities on an indemnity and per-occurrence trigger basis, while the reinsurance will run across a four-year period from December 1st, we are told.

A currently $100 million tranche of Series 2026-2 Class AA notes are the less risky later, having an attachment point of $300 million, taking a share of losses up to exhaustion at $600 million, sources said, giving room for the issuance to be upsized from the initial target, should SafePoint elect to.

The $100 million of Series 2026-2 Class AA notes that Nature Coast Re is offering come with an initial attachment probability of 0.86%, an initial base expected loss of 0.73% and are being offered to investors with price guidance in a range for a spread of between 4% and 4.75%, we understand.

A currently $150 million tranche of Series 2026-2 Class A notes are more risky later, still having an attachment point of $300 million, but taking a share of losses up to exhaustion at $1.3 billion, sources said, again giving room for upsizing.

The $150 million of Series 2026-2 Class A notes that Nature Coast Re is offering come with an initial attachment probability of 3.18%, an initial base expected loss of 1.66% and are being offered to investors with price guidance in a range for a spread of between 6.75% to 7.5%, sources said.

We understand the $300 million attachment point in each case is after various inuring reinsurance arrangements and we are told an effective first-event attachment equivalent would be at around $600 million for the A notes and $1.6 billion for the AA’s. It’s important to note though, that as stated reinsurance was eroded the effective attachment could reduce in each case, we suspect.