California FAIR Plan raises Golden Bear Re wildfire cat bond target to $750m

The California FAIR Plan Association has raised the target for its debut wildfire catastrophe bond Golden Bear Re Ltd. (Series 2026-1) to provide it an even more meaningful $750 million of reinsurance, while the price guidance for the notes has been revised at the bottom of initial guidance, Artemis understands from sources.

The California FAIR Plan Association, the insurer of last resort for property owners needing basic fire insurance in the state, ventured into the catastrophe bond market with its first-time sponsorship back in November.

At first the initial target was to secure at least $250 million in reinsurance from this Golden Bear Re cat bond.

As we reported last week, the California Fair Plan’s target for wildfire reinsurance from its debut catastrophe bond increased, with the offering size then pitched at between $350 million and $500 million, while the price guidance was narrowed towards the lower-end of the initial range.

Now, we’ve learned from sources of a further significant increase in offering size, as the Golden Bear Re 2026-1 wildfire cat bond is now pitched at a meaningful $750 million in size for the California FAIR Plan, while at the same the price guidance has now fallen to the low-end of the original range of spreads on offer.

Even at its initial target size, this Golden Bear Re 2025-1 catastrophe bond was set to become the largest pure wildfire catastrophe bond ever issued.

Now, if the deal prices at the revised $750 million target size, this will be more than triple the size of the previous largest wildfire cat bond, which was $200 million back in 2018, demonstrating the growing comfort cat bond investors have in assuming peak wildfire exposures.

Given the raised for a second time target, Golden Bear Re Ltd. is now offering investors a $750 million single tranche of Series 2026-1 Class A notes.

Those notes will provide the California FAIR Plan with capital markets backed protection covering wildfire losses in the state of California on an indemnity trigger and per-occurrence basis, over a three year term running to the end of 2028.

The Class A notes will come with an initial expected loss of 2.24% and were first offered to investors with spread price guidance in a range from 10.5% to 11.5%.

In our first update we reported that the price guidance had been revised to a lower range for a spread of between 10.5% and 11%, so narrowed to the lower-half of the initially marketed range.

Now, we understand the larger $750 million offering of notes are pitched with a risk interest spread of 10.5%, so at the bottom of the initial range.

If successfully priced to provide the upsized $750 million of wildfire reinsurance for the California FAIR Plan, this will become one of the largest catastrophe bonds ever issued for a first time sponsor entrant to the market.

This new deal will take the number of pure wildfire catastrophe bonds issued this year to four so far, which is the most we’ve ever recorded in our Deal Directory.

As we also reported last week, broker Acrisure Re said that it believes wildfire cat bonds are poised for further growth as risk models and structures advance.

You can read all about this new Golden Bear Re Ltd. (Series 2026-1) catastrophe bond and view details on almost every other cat bond ever issued in our extensive Artemis Deal Directory.