Zenkyoren targets mid-guidance pricing for $100m Nakama Re 2026-1 Japan quake cat bond

Zenkyoren is now targeting mid-guidance pricing for the $100 million of multi-year collateralized Japanese earthquake reinsurance protection it aims to secure from its new Nakama Re Pte. Ltd. (Series 2026-1) catastrophe bond transaction, Artemis has learned.

Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, made its return to the catastrophe bond market earlier this month, as the company looks to add to its capital market backed aggregate Japanese earthquake reinsurance protection.

The initial target with this Nakama Re 2026-1 cat bond, was for the mutual insurer to secure at least $100 million in fully-collateralized Japanese earthquake reinsurance protection from cat bond investors.

We understand that, as of this time, the size target has not been changed from the initial $100 million, but Zenkyoren is looking to capitalise on investor appetites for risk by lowering the pricing for the cat bond notes.

This new Nakama Re 2026-1 issuance will mark the sixteenth catastrophe bond directly sponsored by Zenkyoren that we have listed in our extensive Deal Directory.

As things stand, Nakama Re Pte. is still offering a single $100 million tranche of Series 2026-1 cat bond notes that will provide Zenkyoren with fully-collateralized Japanese earthquake reinsurance protection structured on a three-year aggregate, indemnity triggered basis.

As we’ve explained previously, the full term of the coverage is set to run across five years, to mid-April 2031, across three annual aggregate risk periods, each three-years in length, that overlap across the full term.

The still $100 million tranche of Series 2026-1 Class 1 notes that Nakama Re Pte. is offering come with an initial attachment point at JPY 1.8 trillion of losses and cover a layer to JPY 2 trillion.

The notes will sit within a roughly JPY 200 billion layer of the Zenkyoren reinsurance tower and also feature an aggregate franchise deductible of JPY 270 billion, the same as all its recent cat bond deals.

The Nakama Re Series 2026-1 Class 1 cat bond notes will also have an initial annualised attachment probability of 0.87%, an initial annualised expected loss of 0.82%, and were initially offered to cat bond investors with price guidance for a risk interest spread in a range from 1.9% to 2.4%.

We’re now told that price guidance has been reduced and currently stands as a single figure at 2.1%, so within the mid-range of the initial spread guidance.

As a result, it appears that Zenkyoren is looking to capitalise on cat bond investor demand, as well as still attractive market conditions, to secure its latest catastrophe bond coverage at a lower price.

As a reminder, you can read all about this Nakama Re Pte. Ltd. (Series 2026-1) catastrophe bond and every other cat bond transaction in the Artemis Deal Directory.