SageSure, the catastrophe-exposed property specialist MGU, has now finalised its latest catastrophe bond sponsorship, securing the targeted $175 million of multi-peril reinsurance protection through the Gateway Re Ltd. (Series 2026-2) deal to protect the Auros Reciprocal Insurance Exchange and Interboro Insurance Company, this publication has learned.
SageSure came back to the catastrophe bond market earlier this month with the thirteenth issuance in the Gateway Re series of cat bonds.
All of the Gateway Re cat bond series provide capital markets backed reinsurance to protect a range of underwriting entities owned by or linked to SageSure.
The initial target was to secure $175 million of multi-peril reinsurance protection on a fully-collateralized basis for the Auros Reciprocal Insurance Exchange and Interboro Insurance Company, both entities that sit beneath Slaine Insurance Holdings, LLC.
In our first update on this deal, we reported that SageSure had maintained the issuance target size at $175 million, but was aiming to lower the pricing of the risk interest spread it will pay for the reinsurance coverage.
Now, we’ve learned that the Gateway Re 2026-2 cat bond has been successfully priced, securing the $175 million of protection for Auros and Interboro, while the notes spreads were finalised at attractive levels for the sponsor.
As a result, the Gateway Re Ltd. Bermuda domiciled special purpose insurer (SPI) will now issue $175 million of notes across two Series 2026-2 classes when the deal settles early next month, with the notes set to provide indemnity and per-occurrence based reinsurance to the ceding entities over a three-year term from July 1st 2026.
The cat bond notes will initially provide the ceding entities with multi-year reinsurance against losses from the U.S. perils of named storm, earthquake, severe thunderstorm, winter storm and wildfire, initially across the states of Florida, Louisiana, Mississippi, New York, South Carolina and Texas.
The $75 million Class A tranche of notes notes come with an initial base expected loss of 1.99%. These notes were first offered to cat bond investors with spread price guidance in a range from 6.75% and 7.5%, which was then lowered to a revised range of 6.25% and 6.75%. We’re now told the Class A notes priced to pay investors an initial risk interest spread of 6.25%, so the bottom end of reduced guidance.
The riskier $100 million of Class B notes come with an initial base expected loss of 5.29%. They were first offered to investors with spread price guidance in a range from 11.75% and 12.75%, which later narrowed to a tighter spread range of 11.75% and 12.25%. We’re now told the Class B notes priced to pay investors an initial risk interest spread of 12%, so within the lower-half of initial guidance.
As we explained, SageSure appears to have prioritised price over size with its latest catastrophe bond, securing its targeted reinsurance coverage for the ceding underwriting entities at better than initially targeted pricing.
Earlier this month, SageSure priced and secured the $670 million Gateway Re Ltd. (Series 2026-1) issuance, which marked the largest cat bond in the Gateway Re series of deals yet.
That moved the company up to third place in the Artemis catastrophe bond sponsor leaderboard, with just over $3.1 billion in risk capital outstanding across cat bonds for related underwriting entities.
As a reminder, you can read all about this new Gateway Re Ltd. (Series 2026-2) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.
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