Leadenhall secures upsized $75m Tranquil Re cat bond for Nectaris Re at low-end pricing

Leadenhall Capital Partners LLP, the specialist insurance-linked securities investment manager, has now secured an upsized $75 million of US named storm and earthquake protection for rated reinsurance platform Nectaris Re, as the firm’s debut Arthur Re Ltd. – Tranquil Re 2026-1 catastrophe bond has now been priced at the low-end of initial guidance, Artemis can report.

The Tranquil Re 2026-1 catastrophe bond was first marketed in June, as Nectaris Re Ltd., the rated reinsurance platform backed by ILS manager Leadenhall Capital Partners LLP, was lining up to benefit from its first cat bond backed retrocessional reinsurance.

Initially, the target was to secure $60 million of US peak catastrophe peril retrocessional reinsurance to protect Nectaris Re.

We then reported in a first update on this Tranquil Re 2026-1 deal, that the target size for the issuance was raised to between $70 million and $75 million, while at the same time the price guidance was narrowed and revised downwards towards the lower-end of the initial range.

Now, we understand that the offering of Tranquil Re 2026-1 catastrophe bond notes has been successfully priced, with the offering size now finalised at the top-end of $75 million.

At the same time, the notes have been priced at the low-end of the revised guidance range, which is the bottom-end of the initial range of spreads that had been offered to investors.

As a result, Leadenhall Capital Partners now becomes the latest of the major ILS investment management firms to successfully tap into capital markets sources of reinsurance through a catastrophe bond issuance.

Once settled, the Tranquil Re 2026-1 cat bond notes will provide valuable retrocessional hedging capacity to protect its underwriting vehicle Nectaris Re against peak catastrophe loss events.

The Tranquil Re 2026-1 cat bond notes are being issued using Gallagher Re’s Arthur Re Ltd. platform, which provides an efficient and lower-cost route to market for index triggered catastrophe bonds, the third offering from the structure. They are now the third successfully priced cat bond offering through the Arthur Re platform.

With their pricing now finalised, the Tranquil Re 2026-1 Class A cat bond notes are confirmed to provide Nectaris Re Ltd. with a $75 million source of catastrophe retro reinsurance protection against losses from US named storms and earthquakes, over a roughly two year term to the end of June 2028, on an industry-loss trigger and per-occurrence basis.

The Tranquil Re 2026-1 Class A catastrophe bond notes come with an initial expected loss of 7.19%. They were first offered to investors with price guidance for a spread of between 12% and 12.75%, which was later lowered and narrowed to a revised range of 12% to 12.25%

We can now confirm that the 25% upsized $75 million of Tranquil Re 2026-1 Class A catastrophe bond notes have been priced to pay investors an initial risk interest spread of 12%, so the low-end of guidance and reflecting a just over 3% drop in pricing from the initial mid-point.

For Leadenhall Capital Partners, this first catastrophe bond to support the Bermuda based rated reinsurance vehicle Nectaris Re it utilises will help moderate exposure to peak North American catastrophe events, locking in multi-year coverage on an efficient basis.

Ultimately, the cat bond will also act as a hedge for the Leadenhall Capital Partners ILS funds, which source their reinsurance business via Nectaris Re, and so the benefits of that protection cascade to their investor base as well.

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.