Porch Group, the US homeowner’s specialist insurer has now priced its debut catastrophe bond, securing the targeted $100 million in multi-peril collateralized catastrophe reinsurance through the Harbor Crest Re Ltd. (Series 2026-1) issuance, while the notes priced at the lowest-end of reduced guidance, Artemis has learned.
Porch made its debut in the catastrophe bond market for the first time in June, seeking $100 million of reinsurance from the capital markets to protect its two underwriting entities, the Porch Insurance Reciprocal Exchange and Homeowners of America Insurance Company.
In our first update on this deal, we reported that the size target had not been changed from the initial $100 million, however, Porch was looking to capitalise on investor appetites for risk by lowering the pricing of the notes on this Harbor Crest Re 2026-1 issuance.
Now we’re told, the targeted $100 million size has been achieved, while the pricing of the notes has been finalised at the bottom of the reduced range.
Harbor Crest Re Ltd. will now issue a single $100 million tranche of Series 2026-1 Class A notes to investors, designed to provide Porch’s underwriting entities with a roughly four-year source of collateralized and multi-peril reinsurance protection.
As we’ve explained before, the notes will cover Porch against certain losses from named storms, winter storms, severe weather events, wildfire and fire-following earthquake events across the 50 states of the US and D.C. and have been structured on a per-occurrence and indemnity trigger basis.
The $100 million tranche of Series 2026-1 Class A notes that Harbor Crest Re will issue have an initial base expected loss of 1.97%.
The notes were initially offered to cat bond investors with price guidance for a spread in a range from 5% to 5.75%, which was then later reduced to a revised and lower range of between 4.5% and 5%.
We’re now told the $100 million of notes have been priced to pay investors a spread of 4.5%, so below the initial guidance and at the bottom of the reduced range.
As a result, Porch Group has managed to successfully secure its targeted multi-peril collateralized catastrophe reinsurance limit at lower than anticipated pricing through its debut cat bond.
It also continues the rapid momentum seen across the cat bond market this year, as a growing number of first-time sponsors have ventured into the capital markets for efficient and diversified reinsurance solutions.
As a reminder, you can read all about this Harbor Crest Re Ltd. (Series 2026-1) transaction and every other catastrophe bond deal in our extensive Artemis Deal Directory.
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