Leadenhall’s Tranquil Re 2026-1 cat bond for Nectaris Re could upsize to $75m

The Leadenhall Capital Partners LLP linked Arthur Re Ltd. – Tranquil Re 2026-1 catastrophe bond could upsize to provide as much as $75 million of US named storm and earthquake protection for the ILS manager backed rated reinsurance platform Nectaris Re, while the price guidance for the notes has now been lowered, Artemis understands.

Earlier in June, we reported that Nectaris Re Ltd., the rated reinsurance platform backed by ILS manager Leadenhall Capital Partners LLP, was targeted to receive its first catastrophe bond protection from this Tranquil Re 2026-1 cat bond.

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

Now, we’re told the issuance is targeted to increase in size to between $70 million and $75 million, while at the same time the price guidance has been revised downwards and narrowed towards the lower-end of the initial range.

Leadenhall Capital Partners is the latest of the major ILS investment managers looking to tap into capital markets sources of reinsurance through a catastrophe bond issuance, as a mechanism to source hedging capacity to protect its underwriting vehicle.

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.

Now targeted to upsize, the $70 million to $75 million of Tranquil Re 2026-1 Class A notes are designed to provide Nectaris Re Ltd. 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, 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% and were first offered to investors with price guidance for a spread of between 12% and 12.75%.

Now, that price guidance has been lowered and narrowed to a revised range of 12% to 12.25%, we are told, as more attractive price execution is sought for the issuance.

We understand this is still being targeted for an early July settlement, although it may price in June. As a result, it will fall into our third-quarter issuance figures, given we categorise cat bonds in our issuance statistics by their settlement date.

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.