CEA secures 60% upsized $400m Ursa Re II 2025-1 catastrophe bond

The California Earthquake Authority (CEA) has now priced its latest catastrophe bond, securing the 60% top-end target size for $400 million of earthquake reinsurance limit from this Ursa Re II Ltd. (Series 2025-1) issuance, Artemis has learned.

The California Earthquake Authority (CEA) came back to the catastrophe bond market in May with an initial target to secure $250 million of earthquake reinsurance protection from investors through this new offering.

As we explained at the time, this is the first time the Ursa Re II special purpose insurer has been used by the CEA since late 2022 and this new issuance becomes the 22nd catastrophe bond directly sponsored by the California Earthquake Authority (CEA) that we have listed in our Deal Directory.

As we reported in our first update on this cat bond offering, we’d learned that the CEA had raised its target and was then aiming to secure between $300 million and as much as $400 million of reinsurance limit with this Ursa Re II 2025-1 cat bond issuance.

Now, sources tell us that the upper-target size has been achieved, for $400 million of limit to be secured, while the notes priced at the revised guidance which was within the upper-half of the initial range.

As a result, this Ursa Re II Series 2025-1 cat bond will provide the CEA with $400 million of fully-collateralized California earthquake reinsurance protection, on an indemnity trigger and annual aggregate basis, running across a three-year term.

The now confirmed at $400 million of Class G notes come with an initial expected loss of 4.88%.

The notes were first offered to investors with price guidance in a range from 8.5% to 9.25%, which was later revised to the single figure of 9% and that is where we understand the spread has now been priced, so within the upper-half of the initial range that was offered.

As a result, the $400 million of Ursa Re II Series 2025-1 Class G notes will pay investors a spread multiple of slightly over 1.84 times the expected loss.

Having upsized its latest catastrophe bond by 60% to provide $400 million of reinsurance limit, the CEA has more than replaced a $245 million Ursa Re II Series 2022-1 cat bond scheduled to mature this month.

As we wrote on Friday in a report on the insurers latest reinsurance renewals from April, the catastrophe bond component of the CEA’s risk transfer tower has been stable at $2.455 billion as of April 2025.

Once the upcoming maturity is taken into account and this new $400 million cat bond is added, the CEA’s catastrophe bond protection will rise further to $2.61 billion outstanding.

As things stand, that will leave the CEA in sixth place in our catastrophe bond sponsor leaderboard.

You can read all about this new Ursa Re II Ltd. (Series 2025-1) catastrophe bond from the California Earthquake Authority (CEA) and every other cat bond ever issued in the extensive Artemis Deal Directory.