Ariel Re secures $125m of retro from first Titania Re cat bond to use London Bridge 2 PCC

Ariel Re has now successfully priced its latest catastrophe bond, securing the targeted $125 million of US multi-peril retrocession through its London Bridge 2 PCC Limited (Titania Re 2026-1) issuance that is the reinsurers’ first to utilise the Lloyd’s insurance-linked securities structure, Artemis can report.

Global reinsurance company Ariel Re returned to the catastrophe bond market at the end of March, looking to expand on its capital markets backed sources of retrocessional reinsurance.

The company had previously sponsored five catastrophe bonds using its Bermuda based special purpose insurer Titania Re Ltd., but this new and sixth issuance named Titania Re comes through a UK domiciled special purpose reinsurance vehicle, the Lloyd’s of London sponsored structure London Bridge 2 PCC Limited.

As we said at the time of first reporting on this deal, Ariel Re sponsors its cat bonds with its Syndicate 1910 at Lloyd’s as the named ceding entity and beneficiary of the coverage. So a switch to use the Lloyd’s-linked issuing structure may be deemed efficient, or it could just be a way of diversifying its issuance across jurisdiction locations.

Previously, Ariel Re has utilised the London Bridge ILS structure for a capital raise for itself in 2023 and to fund its third-party capital unit Ariel Re Capital Partners in 2025, so it is a vehicle the reinsurer is familiar with.

Ariel Re has now secured the targeted $125 million of retro protection from what will become its sixth catastrophe bond since 2021, through pricing of the notes yesterday we understand.

Read about all of Ariel Re’s catastrophe bonds by filtering our Deal Directory by sponsor.

As a result, London Bridge 2 PCC Limited will now issue and sell to investors two tranches of Series 2026-1 notes, via two protected cells named Titania Re 2026-1 Class A and Titania Re 2026-1 Class B.

The proceeds will be used to collateralize reinsurance agreements between the protected cells of London Bridge 2 PCC and Ariel Re’s Syndicate 1910, affording the reinsurer a $125 million source of multi-year US focused property catastrophe retrocession covering losses from US named storms, earthquakes and wildfire events on an industry-loss index trigger and annual aggregate basis.

This protection will run across three annual risk periods until April 2029, while there is a franchise deductible of $125 million for each named storm or earthquake event, and $240 million for each wildfire loss.

A $75 million tranche of Titania Re 2026-1 Class A notes come with an initial base expected loss of 3.08%. They were first offered to cat bond investors with price guidance in a range from 6.75% to 7.5% and we’re now told the notes priced to pay investors an initial risk interest spread of 7.5%, so at the upper-end of guidance.

A $50 million tranche of Titania Re 2026-1 Class B notes are riskier, having an initial base expected loss of 6.7%. These notes were first offered to cat bond investors with price guidance in a range from 14.5% to 15.5% and we’re told have now been priced to pay investors an initial risk interest spread of 15%, so at the mid-point of guidance.

Meaning, Ariel Re has successfully secured an additional source of catastrophe bond market backed retrocession with this new offering, adding further annual aggregate buffers for its peak peril exposures in the United States.

It marks another catastrophe bond issuance to come out of the UK, with the Lloyd’s sponsored London Bridge 2 PCC continuing to gain traction as a structure for insurance-linked securities.

You can read all about this new London Bridge 2 PCC Limited (Titania Re 2026-1) catastrophe bond from Ariel Re, as well as details on over 1,000 other cat bond transactions in the extensive Artemis Deal Directory.