Louisiana Citizens Property Insurance Corporation has returned to the catastrophe bond market for its twelfth sponsorship, this time seeking a $150 million initial target for collateralized named storm reinsurance from a Bayou Re Ltd. (Series 2026-1) issuance, Artemis has learned.
This will be the fourth takedown of a catastrophe bond under the Bayou Re Ltd. special purpose insurer (SPI) in Bermuda, as Louisiana Citizens continues to expand its multi-year hurricane and named storm reinsurance protection with the support of global insurance-linked securities investors.
Now its twelfth cat bond sponsorship, this Bayou Re 2026-1 deal will mark the seventh year in a row that Louisiana Citizens has sponsored a new cat bond.
Read about all of Louisiana Citizens’ catastrophe bond sponsorships in our Deal Directory.
Louisiana Citizens currently has $750 million of cat bond protection outstanding, according to our leaderboard. $195 million of that from a 2023-1 issuance is scheduled to mature prior to hurricane season this year, so it’s good to see the non-profit insurer back in the market to replace some or all of that reinsurance.
Bayou Re Ltd. is offering to investors a $150 million single Class A tranche of Series 2026-1 notes, with the proceeds from their sale set to be used to collateralize a reinsurance agreement between the SPI issuer and Louisiana Citizens.
These Bayou Re Series 2026-1 cat bond notes will protect Louisiana Citizens with a capital markets backed and collateralized source of reinsurance against named storm losses in the state, structured using an indemnity trigger and per-occurrence basis, across a three-year term to the end of April 2029, we are told.
The $150 million Class A tranche of notes would initially attach their coverage at $540 million of losses to Louisiana Citizens, with an exhaustion point at $1.05 billion, leaving plenty of room for the issuance to upsize if the sponsor chooses.
The Series 2026-1 Class A cat bond notes that Bayou Re Ltd. is offering come with an initial attachment probability of 3.58%, an initial base expected loss of 2.5% and are being offered to cat bond funds and investors with price guidance in a range from 6.75% to 7.25%, sources said.
Louisiana Citizens layers its cat bond protection through the mid to upper layers of the tower and we understand catastrophe bonds are occupying part or all of layers across a roughly $1 billion stretch of the program at this time, which is testament to the reinsurance strategy the non-profit insurer has employed with the help of its brokers.
You can read all about this new Bayou Re Ltd. (Series 2026-1) catastrophe bond and every other cat bond issued in our extensive Artemis Deal Directory.
