Nationwide Mutual now targets up to $325m of reinsurance from Aquila Re I 2026-1 cat bond

Nationwide Mutual Insurance Company is aiming to upsize its new catastrophe bond, with the revised target now being to secure up to $325 million in multi-peril reinsurance protection through its new Aquila Re I Ltd. (Series 2026-1)  transaction, while the price guidance has been lowered for each of the tranches of notes being offered, Artemis can report.

Nationwide Mutual made its return to the catastrophe bond market in April, with this new Aquila Re I deal set to become the eleventh Nationwide sponsored catastrophe bond issuance that we have listed in our extensive Deal Directory.

This deal will also become the third to be issued using the Bermuda-based Aquila Re I Ltd. special purpose insurer, with Nationwide having last secured $225 million of reinsurance through an Aquila Re I Ltd. (Series 2024-1) issuance two years ago.

Initially, Nationwide Mutual was targeting $200 million of multi-peril and multi-year indemnity triggered and per-occurrence based reinsurance protection from this new transaction.

Now, we’re told that the latest update on the deal shows that up to $325 million of reinsurance protection is now being sought from this issuance.

At the same time as which, the price guidance has been adjusted for both of the tranches of notes on offer.

We’re told that, at this time, this latest cat bond under Aquila Re I Ltd. now targets between the initial $200 million and up to $325 million of multi-peril and multi-year indemnity triggered and per-occurrence based reinsurance protection for Nationwide Mutual.

Aquila Re I Ltd. is aiming to issue two tranches of Series 2026-1 notes, that will be sold to investors and the proceeds used to collateralize reinsurance agreements with Nationwide.

The two tranches of Aquila Re I Series 2026-1 cat bond notes on offer will protect Nationwide Mutual against losses from the perils of US named storm, earthquake, severe thunderstorm, winter storm, wildfire, meteorite impact, volcanic eruption, the same range of perils as its previous two cat bonds under the structure.

The protection from the Aquila Re I Series 2026-1 cat bond notes will run across a four-year term, from June 2026 to the end of May 2030.

What was a $100 million Series 2026-1 Class A-1 tranche of notes are now targeted between $100 million and as much as $190 million in size, we are told.

The Class A-1 tranche of notes would attach their coverage at $750 million of losses after stated reinsurance, exhausting at $1.15 billion, giving them an initial attachment probability of 0.64%.

These Class A-1 notes come with an initial base expected loss of 0.52%, and they were initially offered to cat bond investors with price guidance in a range from 4% to 4.75%. That price guidance has now been updated to a tighter spread of between 3.75% to 4%, so below the initial range.

What was also a $100 million Class B-1 tranche of notes are now targeted between $100 million and $135 million in size.

These Class B-1 would attach their coverage at $1 billion of losses but have no stated reinsurance, which makes them a riskier layer, exhausting at $1.95 billion, giving them an initial attachment probability of 2.44%.

The Class B-1 notes come with an initial base expected loss of 1.24%, and they were originally offered to cat bond investors with price guidance in a range from 4.75% to 5.5%. That price guidance has been updated to a tighter spread of between 4.5% to 4.75%, so again below the initial range

As a result, it seems Nationwide Mutual is open to securing more reinsurance than was initially targeted with its latest Aquila Re I catastrophe bond.

As a reminder, you can read all about this new Aquila Re I Ltd. (Series 2026-1) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.