Veraison Re Ltd. (Series 2025-1)

This will be the third catastrophe bond to be sponsored by GeoVera Insurance Holdings, Ltd., as the cat-exposed property specialist company returns to the capital markets seeking $275 million or more in fully-collateralized US earthquake reinsurance protection through this Veraison Re Ltd. (Series 2025-1) issuance.

GeoVera is again using its Bermuda licensed special purpose insurer (SPI) Veraison Re Ltd. for this Series 2025-1 catastrophe bond issuance.

Veraison Re will issue two tranches of notes, that will be sold to cat bond investors and the proceeds used to collateralize reinsurance agreements between the SPI and GeoVera.

These reinsurance agreements will provide a roughly three-year source of US earthquake reinsurance protection from the capital markets, with redemption of the notes scheduled for March 8th 2028, covering GeoVera’s insurance underwriting entities, GeoVera Insurance, GeoVera Specialty Insurance Services, and Coastal Select, we are told.

The earthquake reinsurance protection from this Veraison Re 2025-1 catastrophe bond will be provided on an indemnity trigger and per-occurrence basis to GeoVera.

A $200 million tranche of Series 2025-1 Class A notes will cover a share of GeoVera’s losses from an attachment point of $700 million to exhaustion at $1 billion, sources said.

This gives the Class A notes an initial attachment probability of 1.79%, an initial expected loss of 1.43% and these notes are being offered with price guidance in a range from 4% to 4.5%.

A $75 million tranche of Class B notes would cover a share of losses from attachment at $425 million to exhaustion at $575 million, we are told, so are a riskier layer.

The Class B notes have an initial attachment probability of 2.99%, an initial expected loss of 2.57% and these notes are being offered with price guidance in a range from 6% to 6.75%, sources told us.

Update 1:

We’re told that GeoVera is looking to upsize its latest Veraison Re 2025-1 catastrophe bond to between $350 million and $400 million.

Both tranches of notes look likely to upsize, while the price guidance has also fallen for each of them.

The Class A notes are now targeted at between $250 million and $275 million in size, with price guidance updated to a range of 3.5% to 4%.

The Class B notes are now targeted at between $100 million and $125 million, while their price guidance has also been updated at 5.5% to 6%.

Update 2:

We’re now told that GeoVera is seeking between $425 million and $450 million of reinsurance from this new Veraison Re 2025-1 catastrophe bond issuance, while the price guidance has fallen again.

The Class A notes are now targeted at between $300 million in size, with price guidance now fixed at 3.5%, so the bottom of the reduced range.

The Class B notes are now targeted at between $125 million and $150 million, while their price guidance has been lowered again to between 5% and 5.5%.

Update 3:

GeoVera secured its upsized $450 million target for earthquake reinsurance protection from this Veraison Re 2025-1 catastrophe bond.

The Class A notes were finalised at $300 million in size and priced to pay investors a spread of 3.5%, so the bottom of the previously reduced range.

The Class B notes were finalised at $150 million in size and priced to pay investors a spread of 5%, so again at the bottom of the previously reduced range.