Spinnaker secures $100m Mountain Re 2026-1 cat bond at below guidance pricing

Spinnaker Insurance Company has now secured $100 million of US multi-peril collateralized reinsurance from the capital markets through its new Mountain Re Ltd. (Series 2026-1) issuance, pricing the notes at the low-end of reduced guidance, Artemis can report.

Spinnaker Insurance Company, the personal and commercial lines program and fronting specialist, made its return to the catastrophe bond market for its second sponsorship back in April, as the company looked to renew and extend its cat bond backed reinsurance protection.

Initially, Spinnaker Insurance was targeting $100 million of US multi-peril collateralized reinsurance protection from its Mountain Re Series 2026-1 issuance.

As we reported in our first update on this transaction, that target remained, but the price guidance for the risk interest spread the notes would pay had dropped as the sponsor targeted strong execution of the offering.

We have now been told that Spinnaker Insurance has successfully priced the notes at the lowest-end of the reduced guidance, securing its targeted $100 million of capital markets backed US multi-peril collateralized reinsurance protection.

With these new cat bond notes now priced and the coverage secured once the deal settles, Mountain Re will now issue a $100 million tranche of Series 2026-1 Class A notes that will provide Spinnaker Insurance with reinsurance against losses from a range of US perils, being US named storm, earthquake, severe thunderstorm, winter storm and fire.

As we’ve explained before, fire is the new peril that has been introduced to this deal, which is largely California wildfire exposure, and the notes main exposure is to wildfire risk this time on an expected loss contribution basis.

This Mountain Re 2026-1 catastrophe bond will provide Spinnaker Insurance with reinsurance on a per-occurrence and indemnity trigger basis that runs across a three-year term, to June 7th 2029.

The $100 million of Series 2026-1 Class A cat bond notes that Mountain Re will issue come with an initial base expected loss of 2.46%.

These notes were initially offered to cat bond investors with spread price guidance in a range from 7.75% to 8.5%, which was later lowered to a revised range of 7.25% to 7.75%.

We now understand that the notes have been priced to pay investors an initial risk interest spread of 7.25%, so the low-end of the revised guidance.

Spinnaker Insurance Company has managed to secure its targeted reinsurance through its second catastrophe bond with the company also utilising investor appetite within the market to get the notes priced at the low-end of reduced guidance as well.

As a reminder, you can read all about this new Mountain Re Ltd. (Series 2026-1) catastrophe bond, and view details of more than 1,000 other cat bond issuances, in the extensive Artemis Deal Directory.