Veraison Re Ltd. (Series 2026-1)

This will be the fourth catastrophe bond issuance from Veraison Re Ltd. and again a source of multi-year fully-collateralized US earthquake catastrophe reinsurance is being sought for entities of the GeoVera Nova Holdings group of insurance companies, which are entities owned and invested in by the catastrophe exposed managing general underwriting specialist SageSure.

Bermuda licensed special purpose insurer (SPI) Veraison Re Ltd. is aiming to issue two tranches of Series 2026-1 catastrophe bond notes.

These notes will be sold to cat bond investors and the proceeds used to collateralize reinsurance agreements between the SPI and GeoVera entities.

These reinsurance agreements will provide a roughly three-year source of US earthquake reinsurance protection from the capital markets starting from March 1st, with redemption of the notes scheduled for March 8th 2029.

We are told the Veraison Re 2026-1 cat bond will protect GeoVera’s insurance underwriting entities, GeoVera Insurance, GeoVera Specialty Insurance Services, and Coastal Select, the same as the previous year’s deal.

The earthquake reinsurance protection from this Veraison Re 2026-1 catastrophe bond will protect these insurers on an indemnity trigger and per-occurrence basis, we understand.

An initially $200 million tranche of Series 2026-1 Class A notes will cover a share of GeoVera’s losses from an attachment point of $730 million to exhaustion at $1.13 billion, sources said.

Which gives the Class A notes an initial attachment probability of 0.9%, an initial expected loss of 0.75% and these notes are being offered with price guidance for an initial risk interest spread in a range from 2.75% to 3.25%.

An initially $150 million tranche of Class B notes would cover a share of losses from attachment at $550 million to exhaustion at $700 million, so sit below and are riskier than the A’s.

The Class B notes have an initial attachment probability of 2.87%, an initial expected loss of 2.56% and these notes are being offered with price guidance in a range from 4.25% to 4.75%, we are told.