QBE secures 33% upsized $400m Bridge Street Re 2025-2 cat bond at mid-guidance

QBE Insurance Group, the Australia headquartered global insurance and reinsurance company, has now successfully priced its latest catastrophe bond to secure the one-third upsized $400 million of international peak peril reinsurance from the Bridge Street Re Ltd. (Series 2025-2) issuance, Artemis can report.

As a result, this becomes QBE’s largest catastrophe bond sponsorship so far by a margin of $150 million, as the company demonstrated its increasing comfort with and appetite for capital markets backed and fully-collateralized reinsurance protection.

QBE ventured back to the cat bond market earlier in December, its second cat bond sponsorship of this year following on from a $250 million multi-peril  Bridge Street Re 2025-1 cat bond in January.

The initial target for these Series 2025-2 notes was to secure $300 million or more in international peak peril catastrophe reinsurance.

As we reported in an update yesterday, the target size of this Bridge Street Re Series 2025-2 issuance was lifted to $400 million, while the price guidance was updated to a narrower range within and towards the upper-end of the one the notes were initially offered with.

We are now told that the notes have been successfully priced to provide QBE the one-third upsized $400 million targeted protection.

As a result, Bridge Street Re Ltd. will now issue a $400 million tranche of Series 2025-2 Class A notes, that will be sold to cat bond investors to collateralize a reinsurance agreement with the sponsor.

The notes will provide QBE and certain underwriting subsidiaries of the company, with a $400 million source of reinsurance against losses caused by named storms and earthquakes in the U.S., as well as earthquakes in Australia and New Zealand on a per-occurrence and indemnity trigger basis, running across a three-year term, from January 1st 2026.

The now confirmed to be $400 million tranche of Class A notes that Bridge Street Re Ltd. will issue come with an initial expected loss of 3.33% and were first offered to cat bond investors with price guidance in a range from 7.5% to 8%.

As we reported in our update, that price guidance was revised to a new range of 7.75% to 8%, so narrower and towards the top-end of guidance.

Now, sources have told us that the $400 million of notes have been priced to pay investors an initial risk interest spread of 7.75%, so at the mid-point of the initial guidance that had been offered.

It’s another data point that suggests continued discipline in the catastrophe bond market despite the evident availability of cash and softening of reinsurance rates seen, as investors still demand what they see as reasonable, risk-commensurate pricing and are not willing to chase every new offering down to a below guidance spread.

As a result, QBE will significantly increase its cat bond backed reinsurance protection with this second issuance in the same year, lifting it from the $250 million of reinsurance limit its first sponsorship provided, to a new high for the company of $650 million of catastrophe bond backed protection in-force once this new cat bond settles.

You can read all about this new Bridge Street Re Ltd. (Series 2025-2) catastrophe bond transaction and every other cat bond ever issued in our Artemis Deal Directory.