GeoVera insurers target lower pricing for $350m Veraison Re 2026-1 US quake cat bond

We understand that the price guidance has been lowered slightly for the new Veraison Re Ltd. (Series 2026-1) catastrophe bond issuance, while the target remains $350 million in fully-collateralized US earthquake reinsurance protection for the ceding insurer GeoVera entities.

This transaction is set to be the fourth catastrophe bond in the Veraison Re series of deals, again seeking a source of capital markets backed US earthquake catastrophe reinsurance for GeoVera insurance entities.

The deal launched to investors earlier this month, with a target to secure the aforementioned $350 million of fully-collateralized reinsurance protection backed by collateral from the sale of the cat bond notes being issued.

Now, we’re told that target size remains the same but the sponsors are seeking stronger execution, with a slight reduction in the spreads of offer for each of the two tranches of Series 2026-1 notes that Veraison Re is offering.

As we explained in our first article on this issuance, a $150 million Veraison Re Ltd. (Series 2023-1) cat bond will mature at the start of March 2026, with this new deal targeted to both renew and extend that US earthquake reinsurance protection for GeoVera.

The company also has $175 million Veraison Re Ltd. (Series 2024-1) and $450 million Veraison Re Ltd. (Series 2025-1) catastrophe bonds still in-force to protect the GeoVera underwriting entities.

You can find details of all the Veraison Re catastrophe bonds in our extensive Deal Directory.

This offering sees Bermuda licensed special purpose insurer (SPI) Veraison Re Ltd. aiming to issue two tranches of Series 2026-1 catastrophe bond notes, with a target issuance size of $350 million.

The notes sale to investors will source collateral to provide source of US earthquake reinsurance protection from the capital markets starting from March 1st, to cover GeoVera’s insurance underwriting entities, GeoVera Insurance, GeoVera Specialty Insurance Services, and Coastal Select.

The earthquake reinsurance protection from this Veraison Re 2026-1 catastrophe bond is structured to protect these insurers on an indemnity trigger and per-occurrence basis, over a roughly three-year term.

A still $200 million tranche of Series 2026-1 Class A notes come with an initial expected loss of 0.75% and were first offered with price guidance for an initial risk interest spread in a range from 2.75% to 3.25%. We’re now told that price guidance has been narrowed to the lower-half of the initial range, at 2.75% to 3%.

A still $150 million tranche of Class B notes come with an initial expected loss of 2.56% and were first offered with price guidance in a range from 4.25% to 4.75%,. We understand that the price guidance for these notes has fallen to below the initial range, updated at between 4% and 4.25%.

As a result, it seems GeoVera’s insurers are targeting stronger execution and slightly lower pricing for their latest earthquake catastrophe bond.

While the price drop is not as significant as issuances seen in recent months, that’s likely as the market is resetting to the new spread levels and investor demand, so the initial price guidance is getting closer to where the market might settle these notes.

You can read all about this Veraison Re Ltd. (Series 2026-1) catastrophe bond in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued.