PoleStar Re Ltd. (Series 2026-1)

This is the fourth 144A cyber catastrophe bond sponsored by Beazley under PoleStar Re Ltd. and the first cyber cat bond to come to market so far in 2025.

Beazley continues to build on its cyber cat bond backed reinsurance, with this latest deal set to further stretch the PoleStar Re cyber cat bonds coverage within its tower.

We are told the structure remains very similar to the first three cyber catastrophe bonds from Beazley.

PoleStar Re Ltd., the Bermuda based special purpose insurer (SPI), will look to issue three tranches of Series 2026-1 cyber cat bond notes that will be sold to investors and the proceeds used to collateralize the underlying reinsurance agreements with Beazley.

The cyber reinsurance coverage will be on an indemnity trigger and per-occurrence basis, like the previous PoleStar Re cat bonds.

Similarly again the PoleStar Re 2026-1 notes are designed to provide Beazley with a source of broad cyber reinsurance coverage from the capital markets, protecting it against major cyber loss events that impact its underwriting entities, including its range of syndicates at Lloyd’s and its US insurance underwriting entities.

We’re told the new PoleStar Re 2026-1 cyber cat bond will provide Beazley with coverage over three years through to the end of 2028, meaning the company continues to schedule all its cyber cat bond renewals in an aligned and staggered manner for the months of January over the next few years.

Beazley’s first 144A cyber cat bond, PoleStar Re 2024-1, is scheduled for maturity in January 2026, so being larger this 2026-1 deal should expand on the coverage those $140 million of 2024-1 notes provided.

So, across the three tranches of Series 2026-1 notes that PoleStar Re is offering to investors, the initial target is to secure $200 million of cyber reinsurance.

A $75 million Class A tranche of notes would attach their coverage at $1 billion of losses and cover a share up to $1.4 billion we understand, giving them an initial attachment probability of 0.98%, an initial expected loss of 0.82% and they are being offered with price guidance in a range from 7% to 8%, we are told.

A $75 million Class B tranche of notes would attach their coverage at $600 million of losses and cover a share up to $1 billion we understand, giving them an initial attachment probability of 1.81%, an initial expected loss of 1.31% and they are being offered with price guidance in a range from 8.75% to 9.75%.

The final $50 million Class C tranche of notes would attach their coverage at $500 million of losses and cover a share up to $600 million, giving them an initial attachment probability of 2.33%, an initial expected loss of 2.05% and they are being offered with price guidance in a range from 10.75% to 11.75%, sources said.

So the notes from this PoleStar Re 2026-1 issuance will sit on top of each other to build out more protection in Beazley’s cyber reinsurance tower and take the protection from the capital markets higher up as well, which is a natural progression as its own cyber insurance portfolio continues to grow.

Update 1:

Beazley is aiming to upsize this PoleStar Re 2026-1 cyber catastrophe bond to provide $280 million of reinsurance, we understand.

The Class A notes are now targeted to be $120 million in size, while their pricing has been updated at a lower 7%.

The Class B notes are now targeted to be $100 million in size, while their price guidance has been narrowed to between 9% and 9.25%.

The Class C notes are now targeted to be $60 million in size, while their price guidance has been lowered to between 10.5% and 10.75%.

Update 2:

Beazley secured the PoleStar Re 2026-1 cyber catastrophe bond to provide it with an upsized again $300 million of reinsurance, we understand.

The Class A notes were finalised at $140 million in size and priced to pay investors a risk interest spread of 7%.

The Class B notes priced at $100 million in size, with an initial risk interest spread of 9%.

The Class C notes priced at $60 million in size, while their risk interest spread was finalised at 10.5%.