Sutter Re Ltd. (Series 2026-1)

The California Earthquake Authority (CEA) has returned to the catastrophe bond market for its first sponsorship of 2026.

With this Sutter Re Series 2026-1 cat bond issuance, the California Earthquake Authority (CEA) is seeking to add to its fully-collateralized earthquake reinsurance protection from the capital markets, through what will be the 24th cat bond sponsored by the entity that we have tracked.

Sources have told us that, using its Sutter Re Ltd. special purpose insurer (SPI) which is based in Bermuda, the CEA is targeting issuance of two tranches of Series 2026-1 catastrophe bond notes.

These notes are set to be sold to cat bond investors and the proceeds will be used to collateralize reinsurance agreements between the issuing vehicle Sutter Re Ltd. and the CEA.

The initial target is to secure $300 million of limit across the two tranches of cat bond notes on offer, which will provide the CEA with a four year source of fully-collateralized California earthquake reinsurance protection on an indemnity trigger and annual aggregate basis, like all of the CEA’s cat bonds have done.

Sutter Re is offering a currently $200 million Series 2026-1 Class C tranche of notes that would attach their coverage at $5.503 billion of losses and share in a $500 million layer, giving them an initial attachment probability of 2.43%, an initial expected loss of 2.30% and they are being offered to investors with price guidance in a range from 4.25% to 5%, we are told.

Also on offer is a currently $100 million Series 2026-1 Class F tranche of notes that would attach their coverage at $2.952 billion of losses, again sharing in a $500 million layer, giving them an initial attachment probability of 4.31%, an initial expected loss of 4.05% and these notes are being offered to investors with price guidance in a range from 6.5% to 7.25%, sources said.