Florida Citizens targets $450m Everglades Re II 2026-1 catastrophe bond sponsorship

Florida’s Citizens Property Insurance Corporation is back in the market looking to sponsor another catastrophe bond, with an initial target to secure $450 million or more in reinsurance protection from a new Everglades Re II Ltd. (Series 2026-1), Artemis has learned.

This will become the seventeenth series of cat bond notes sponsored by Florida Citizens and the fifteenth to use the Everglades Re name, since the property insurer of last resort for Florida first sponsorship of a catastrophe bond back in 2012.

Recall that, a year ago Florida Citizens sponsored its largest catastrophe bond yet, securing $1.525 billion of reinsurance from the Everglades Re II Ltd. (Series 2025-1) deal.

That became the largest single series issuance of cat bonds ever seen in the market.

Read about every one of Florida Citizens catastrophe bonds in our extensive Deal Directory.

However, Florida Citizens’ reinsurance need has declined thanks to falling levels of exposure as it has returned policies to the private market through its depopulation program.

As we reported, Florida Citizens projected it will need only around $3 billion of traditional reinsurance and / or catastrophe bonds for the 2026 hurricane season, as its exposure has dropped by around 67%.

At that time it would have had $2.625 billion of indemnity cat bonds from the Everglades Re series of deals available to it to run through this year’s hurricane season.

But, a plan to call and redeem its $1.1 billion 2024 catastrophe bond issuance early and perhaps only replace it with a fresh $600 million issuance, was expected to allow Citizens to take advantage of current market conditions and make savings on its risk transfer, given the lower requirement for protection from private markets this year.

That plan is now in action, with an early redemption notice having been filed we understand, meaning only the $1.525 billion of 2025-1 cat bonds will be reset and remain in-force this year, to which Florida Citizens is now adding this new cat bond sponsorship.

Now, Florida Citizens is back in the market, with its Bermuda based special purpose insurer (SPI) Everglades Re II Ltd. aiming to issue three tranches of Series 2026-1 cat bond notes, each to collateralize a three-year source of reinsurance for Florida Citizens.

These three tranches of Series 2026-1 cat bond notes are being offered to catastrophe bond funds and investors and will provide the Florida Citizens with multi-year annual aggregate named storm reinsurance covering the state of Florida, on an indemnity trigger basis, we understand.

The reinsurance protection will run from the date of issuance in May for a three year term, across three annual aggregate risk periods.

These new Series 2026-1 cat bond notes are expected to sit alongside some of the remaining tranches from the 2025-1 cat bond deal, as well as a currently unknown amount of traditional reinsurance.

Everglades Re II is offering a $125 million tranche of Series 2026-1 Class A notes that would attach their coverage at $4.574 billion of losses and exhaust it at $5.305 billion, giving them an initial attachment probability of 1.46%, an initial base expected loss of 1.35% and they are being offered to investors with spread price guidance in a range from 6% to 6.5%, we understand.

A $150 million tranche of Series 2026-1 Class B notes would attach their coverage at $3.724 billion of losses and exhaust it at $4.574 billion (so sitting beneath the A’s), giving them an initial attachment probability of 2%, an initial base expected loss of 1.74% and they are being offered to investors with spread price guidance in a range from 7% to 7.5%.

A final $175 million tranche of Series 2026-1 Class C notes would attach their coverage at $2.874 billion of losses and exhaust it at $3.724 billion (so sitting beneath the B’s), giving them an initial attachment probability of 2.87%, an initial base expected loss of 2.41% and they are being offered to investors with spread price guidance in a range from 8.75% to 9.25%, sources said.

As you’d expect, the multiples at market on offer are down on recent year cat bond issuances for Florida Citizens, reflecting softer market conditions and a chance of securing more attractively priced reinsurance from the capital markets for the insurer of last resort.

How much traditional reinsurance Florida Citizens actually buys for the 2026 hurricane season may depend on cat bond market conditions, given it could opt to upsize this new offering if conditions are deemed beneficial enough.

Should this cat bond remain at $450 million in size, it is said that Florida Citizens may need around $680 million of traditional reinsurance to fill its projected tower, with total private market cat bond and reinsurance protection of just around $2.8 billion anticipated to be required, slightly less than its earlier projection of close to $2.98 billion for the coming year, we are told.

It’s encouraging to see Florida Citizens looking to maintain a key role for the catastrophe bond market in its reinsurance arrangements for 2026, with cat bonds set to provide a meaningful share of its protection still.

You can read all about this new Everglades Re II Ltd. (Series 2026-1) catastrophe bond being sponsored by Florida’s Citizens Property Insurance Corporation and view details of more than 1,000 other cat bond issuances in the extensive Artemis Deal Directory.