Nectaris Re Ltd., the rated reinsurance platform backed by ILS manager Leadenhall Capital Partners LLP, is targeted to receive its first catastrophe bond protection, through a currently $60 million Arthur Re Ltd. – Tranquil Re 2026-1 issuance, Artemis can report.
Nectaris Re Ltd. is a Class 3A Bermuda-based rated reinsurance platform, which is backed by funds under the management of and advised by specialist insurance linked securities (ILS) and reinsurance investment manager Leadenhall Capital Partners.
This marks the first time an entity linked to Leadenhall Capital Partners has sought retrocessional reinsurance protection from the capital markets.
Leadenhall Capital Partners becomes the latest specialist ILS investment manager to look to access sources of reinsurance capital through a catastrophe bond issuance, as a mechanism to source hedging capacity to protect its underwriting vehicle.
This Tranquil Re 2026-1 cat bond is now the third to come via Gallagher Re’s new Arthur Re Ltd. platform, which was established to provide an efficient and lower cost way to access index triggered catastrophe bond protection from the capital markets.
For this issuance, Arthur Re Ltd. is offering an initially $60 million tranche of Class A notes to investors on behalf of its segregated account named Tranquil Re 2026-1.
The notes are designed to provide Nectaris Re Ltd. with a multi-year source of fully-collateralized multi-peril US peak peril retrocessional reinsurance from the capital markets.
The cat bond notes will provide Nectaris Re with a source of catastrophe protection against losses from US named storms and earthquakes, over a roughly two year term to the end of June 2028, sources have said.
The reinsurance protection from the Tranquil Re 2026-1 Class A catastrophe bond notes will cover Nectaris Re on a per-occurrence and industry loss index trigger basis.
We’re told that the Tranquil Re 2026-1 Class A notes will have an initial attachment at $60 billion of industry losses and exhaust their coverage at $100 billion, which gives them an initial attachment probability of 10.23% and initial expected loss of 7.19%.
The currently $60 million of Tranquil Re 2026-1 cat bond notes are being offered to investors with price guidance for an initial risk interest spread of between 12% and 12.75%, we understand.
It’s encouraging to see another of the largest ILS investment managers, Leadenhall Capital Partners, looking to the catastrophe bond market as a source of risk capital for catastrophe reinsurance protection to cover underwriting portfolios written by its rated structure Nectaris Re.
It’s worth also noting that, currently we understand the Tranquil Re 2026-1 offering is scheduled to be settled in early July, making it a third-quarter issuance. However, should the deal’s offering move quicker through the market than anticipated there is a chance it still becomes a Q2 deal if it settled earlier (we categorise cat bonds in our issuance statistics by their settlement date, not the date on which they have been priced).
You can read all about this new Arthur Re Ltd. – Tranquil Re 2026-1 catastrophe bond and every other cat bond transaction in the Artemis Deal Directory.
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