Spinnaker targets lower pricing for new $100m Mountain Re 2026-1 cat bond

Spinnaker Insurance Company is now targeting lower pricing for its second catastrophe bond sponsorship, still seeking $100 million or more in US multi-peril collateralized reinsurance from a new Mountain Re Ltd. (Series 2026-1) issuance but at a reduced spread, Artemis can report.

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

Roughly three years ago, Spinnaker had sponsored its debut Mountain Re Ltd. (Series 2023-1) catastrophe bond to provide it $110 million of reinsurance against multiple US natural perils. That Mountain Re 2023-1 cat bond is scheduled to mature this June, so Spinnaker is back looking for a renewal of sorts.

While at the same time, this new Mountain Re 2026-1 cat bond also seeks to extend the coverage by introducing a new peril as well.

Read about Spinnaker’s catastrophe bonds in our extensive Deal Directory.

Initially, the target was for Mountain Re to issue a $100 million tranche of Series 2026-1 Class A notes to provide Spinnaker with reinsurance from the capital markets.

We’re told that, at this time, this target size for the issuance has not been changed, but that the price guidance has been lowered as the sponsor targets strong execution of the offering.

As a result, the Mountain Re Series 2026-1 Class A cat bond notes remain targeted to provide Spinnaker with a $100 million source of capital markets backed reinsurance against losses from a range of US perils, being US named storm, earthquake, severe thunderstorm, winter storm and fire.

Fire is the new peril introduced to this deal, which is largely California wildfire exposure we understand and the notes main exposure is to wildfire risk this time, we understand.

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

The still $100 million of Mountain Re Series 2026-1 Class A cat bond notes come with an initial base expected loss of 2.46%. They were initially offered to investors with spread price guidance in a range from 7.75% to 8.5%, but we’re told that range has now fallen to a revised 7.25% to 7.75%.

Which shows Spinnaker targeting strong execution for its second catastrophe bond, as it looks to capitalise on investor appetite in the market to secure the reinsurance at reduced pricing.

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.