Ursa Re Ltd. (Series 2025-1)

The California Earthquake Authority (CEA) has returned to the catastrophe bond market for the first time since late 2023, seeking $200 million or more in California earthquake reinsurance protection through this Ursa Re Ltd. (Series 2025-1) issuance.

This will be the 21st catastrophe bond sponsored by the California Earthquake Authority (CEA) that we have listed in our Deal Directory.

The CEA is using its Ursa Re Ltd. special purpose insurer (SPI) in Bermuda for this new cat bond deal, seeking $200 million or more in earthquake reinsurance from the issuance of a single Series 2025-1 tranche of notes, we understand from sources.

The CEA is again directly facing Ursa Re for this new cat bond, something which started with its late 2023 deal, having previously partnered with a global reinsurance firm it used to front the capital markets for it.

The Ursa Re Series 2025-1 cat bond notes will provide the CEA with a three-year source of California earthquake reinsurance protection, on an indemnity trigger and annual aggregate basis, we understand.

A currently $200 million tranche of Class F notes are being issued and will provide coverage across a $500 million layer of the CEA’s risk transfer tower, while having a $2.1 billion retention in place for the first loss occurrence period, we are told.

The Class F notes will come with an initial attachment probability of 4.38%, an initial expected loss of 4.05% and they are being offered to investors with price guidance in a range from 6.75% to 7.5%, sources explained.

Update 1:

The California Earthquake Authority (CEA) has increased the targeted amount of multi-year collateralized California earthquake reinsurance protection it seeks from this Ursa Re 2025-1 cat bond issuance, with now up to $375 million of coverage being sought, while the price guidance has been fixed at 7.5%, so the top of the initial range.

Update 2:

The CEA’s target for this new Ursa Re 2025-1 cat bond has increased again, with the insurer now looking to double the amount of quake reinsurance it receives, compared to the initial target and now $400 million of notes expected to be offered.

Update 3:

The CEA secured the 100% upsized target of $400 million of reinsurance from this new Ursa Re 2025-1 cat bond, with the spread priced at 7.5%, so the upper-end of initial guidance.