GeoVera secures its largest cat bond yet, as $450m Veraison Re 2025-1 priced

GeoVera Insurance Holdings, Ltd. has secured its largest catastrophe bond issuance yet, as the Veraison Re Ltd. (Series 2025-1) deal has now been priced to provide the company its upsized $450 million target for earthquake reinsurance protection.

As we had reported, GeoVera Insurance Holdings, Ltd returned to the cat bond market with an initial target to secure $275 million of earthquake reinsurance protection, from its third Veraison Re cat bond.

We then learned from sources that GeoVera was looking to upsize its latest catastrophe bond, with the target for this Veraison Re 2025-2 issuance lifted to between $350 million and $400 million.

After which we learned of a second increase to the target size for the catastrophe bond, with between $425 million and $450 million of earthquake reinsurance protection being sought by GeoVera.

Now, we’re told that GeoVera has secured the upper-end of that upsized target, with the Veraison Re 2025-1 cat bond pricing to provide the insurer $450 million of earthquake reinsurance protection.

The insurer had previously sponsored two Veraison Re catastrophe bonds, one in 2023 and one in 2024, that together provide it $325 million of collateralized US earthquake reinsurance protection.

Which makes this new 2025 issuance the largest cat bond for GeoVera yet and we’re also told both tranches of notes being issued have been priced at the low-ends of their previously reduced guidance ranges, indicating strong execution for this issuance.

So, GeoVera has secured a three-year source of US earthquake reinsurance protection from the capital markets on an indemnity trigger and per-occurrence basis through this its third Veraison Re cat bond.

What was initially a $200 million tranche of Series 2025-1 Class A notes grew by 50% to reach $300 million in size.

The Class A notes will come with an initial expected loss of 1.43%. They were first offered to investors with price guidance in a range from 4% to 4.5%, which then fell to 3.50% to 4.00% and have now been priced at the lower-end, for a spread of 3.5% to be paid, we understand.

What was a $75 million tranche of Class B notes eventually doubled in size to provide $150 million in protection.

The Class B notes have an initial expected loss of 2.57%. They were first offered to investors with price guidance in a range from 6% to 6.75%, which then fell to 5.50% to 6.00%, then fell further to between 5% and 5.5% and we’re now told have been priced at the lowest-end of 5%.

GeoVera has maximised its opportunity to increase its reinsurance protection from the capital markets with this deal, capitalising on the strong demand being seen from the cat bond investor base, while also securing the coverage at attractive pricing.

You can read all about this Veraison Re Ltd. (Series 2025-1) in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued.