SageSure, the catastrophe-exposed property specialist MGU, continues to seek $175 million of multi-peril reinsurance protection through its latest catastrophe bond, the Gateway Re Ltd. (Series 2026-2), deal, but the company is aiming to capitalise on investor appetite and has lowered and narrowed the price guidance for the notes, Artemis can report.
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.
Initially, the 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.
We are told that target remains the same, but like most catastrophe bond sponsors, SageSure is aiming to be able to lower the pricing of the risk interest spread it will pay for the coverage.
The Gateway Re Ltd. Bermuda domiciled special purpose insurer (SPI) is offering two classes of Series 2026-2 notes to cat bond investors, with the proceeds of their sale set to be used to collateralize reinsurance agreements with the ceding entities.
This Gateway Re 2026-2 deal will see the notes issued 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 still $75 million of Class A notes that Gateway Re Ltd. is offering would attach their coverage at $235 million of losses and exhaust it at $535 million, giving them an initial attachment probability of 3.83%, and 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%. That guidance has now been lowered to a revised range of 6.25% and 6.75%, we are told.
The still riskier $100 million of Class B notes would attach their coverage at $135 million of losses and exhaust it at $235 million, sitting beneath the Class A’s, giving them an initial attachment probability of 7.58%, and an initial base expected loss of 5.29%.
These notes were first being offered to investors with spread price guidance in a range from 11.75% and 12.75%, but we are now told that guidance has been narrowed to a tighter spread of 11.75% and 12.25%.
As it appears, SageSure looks set to prioritise price over size with its latest catastrophe bond, unless the company opts to upsize it after it has an indication of the final pricing, which can sometimes occur during the marketing phase of cat bonds.
Earlier this month, SageSure priced and secured its $670 million Gateway Re Ltd. (Series 2026-1) issuance, which marked the largest cat bond in the Gateway Re series of deals yet, and 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.
