Torrey Pines Re Ltd. (Series 2026-1)

Palomar Insurance has returned for what will be its seventh under the Torrey Pines Re Ltd. catastrophe bond series, looking to sponsor a transaction to provide its underwriting entities with California earthquake and Hawaii named storm reinsurance protection.

Like other cat bonds in the Torrey Pines Re program from recent years, this new issuance will provide fully-collateralized reinsurance protection to both Palomar Specialty Insurance Company and Palomar Excess and Surplus Insurance Company.

Bermuda based special purpose insurer (SPI) Torrey Pines Re Ltd. is offering investors four tranches of Series 2026-1 catastrophe bond notes, we are told, with an initial target for a $375 million issuance. The notes will be sold to investors and the proceeds used to collateralize reinsurance agreements to protect the Palomar underwriting entities on a multi-year basis.

Three of the tranches of notes will give Palomar capital markets backed reinsurance protection against California earthquake losses, on an indemnity and per-occurrence basis, while a fourth tranche targets Hawaii named storm reinsurance again on a per-occurrence and indemnity trigger basis for the sponsor.

We understand that on the earthquake side, the notes can be expanded to cover other states at a reset, which is again like other recent Palomar cat bond deals.

All four of the tranches of notes will provide Palomar with reinsurance across a roughly three-year term, we are told.

A Series 2026-1 Class A tranche of California earthquake notes are targeting $125 million in reinsurance for Palomar, attaching at $1.49 billion and exhausting coverage at $1.75 billion.

The Class A notes will have an initial attachment probability of 1.31%, an initial expected loss of 1.19% and are being offered to investors with price guidance in a range from 3% to 3.5%, we are told.

A Series 2026-1 Class B tranche of California earthquake notes are targeting $100 million in reinsurance for Palomar, attaching at $650 million and exhausting their coverage at $1.34 billion.

The Class B notes will have an initial attachment probability of 2.86%, an initial expected loss of 2.04% and are being offered to investors with price guidance in a range from 3.75% to 4.25%, we are told.

A Series 2026-1 Class C tranche of California earthquake notes are also targeting $100 million in reinsurance for Palomar, attaching at $325 million and exhausting their coverage at $475 million.

The Class C notes will have an initial attachment probability of 4.56%, an initial expected loss of 4.03% and are being offered to investors with price guidance in a range from 6.25% to 6.75%, sources said.

The final Class D tranche of notes will provide the Hawaii named storm reinsurance protection and are targeting $50 million in cover for Palomar, with an attachment point at $625 million and exhaustion at $725 million.

The Class D notes will have an initial attachment probability of 1.03%, an initial expected loss of 0.96% and are being offered to investors with price guidance in a range from 2.75% to 3.25%, we understand.