The California Earthquake Authority (CEA) is back in the catastrophe bond market to sponsor its first issuance of this year, with an initial target to secure $300 million of fully-collateralized earthquake reinsurance from this new Sutter Re Ltd. (Series 2026-1) issuance, Artemis can report.
For 2026, the CEA has returned and is utilising its Sutter Re Ltd. issuer, which has not been seen in the market since a 2023 cat bond deal, having used vehicles named Ursa Re for all cat bonds sponsored since then.
At this time, the CEA has $2.875 billion of outstanding catastrophe bond coverage still in-force at this time and sits at 5th place in our cat bond sponsors leaderboard.
In June this year, the CEA’s outstanding $425 million of reinsurance from the last Sutter Re 2023-1 cat bond is scheduled to mature, so this new deal looks like an attempt to renew some or all of that protection.
When we last reported on the CEA’s extensive risk transfer tower, the earthquake insurer had limit of $7.912 billion in-force at the end of 2025, with the catastrophe bond market providing its largest share of the risk transfer tower ever at 36% of that total.
The CEA’s risk transfer tower had been shrinking as its exposure declined, but last year the reverse occurred and the tower grew slightly. So it will be interesting to see what the insurer needs in the way of protection through 2026.
View details of every catastrophe bond sponsored by the CEA in the Artemis Deal Directory.
Moving on to the new catastrophe bond sponsorship, which as we said will be the 24th visit to the cat bond market we have tracked from the CEA.
Sources have told us that, using its Sutter Re Ltd. special purpose insurer (SPI) which is based in Bermuda, the CEA is targeting issuance of two tranches of Series 2026-1 catastrophe bond notes.
These notes are set to be sold to cat bond investors and the proceeds will be used to collateralize reinsurance agreements between the issuing vehicle Sutter Re Ltd. and the CEA.
The initial target is to secure $300 million of limit across the two tranches of cat bond notes on offer, which will provide the CEA with a four year source of fully-collateralized California earthquake reinsurance protection on an indemnity trigger and annual aggregate basis, like all of the CEA’s cat bonds have done.
Sutter Re is offering a currently $200 million Series 2026-1 Class C tranche of notes that would attach their coverage at $5.503 billion of losses and share in a $500 million layer, giving them an initial attachment probability of 2.43%, an initial expected loss of 2.30% and they are being offered to investors with price guidance in a range from 4.25% to 5%, we are told.
Also on offer is a currently $100 million Series 2026-1 Class F tranche of notes that would attach their coverage at $2.952 billion of losses, again sharing in a $500 million layer, giving them an initial attachment probability of 4.31%, an initial expected loss of 4.05% and these notes are being offered to investors with price guidance in a range from 6.5% to 7.25%, sources said.
The spread multiples on offer look a little lower than the CEA’s 2025 cat bonds came with, reflecting the softer pricing conditions in cat bonds and reinsurance at this time.
It’s good to see the CEA back in the market, as another long-standing sponsor continues to place the capital markets at the heart of its reinsurance risk transfer arrangements.
You can read all about this new Sutter Re Ltd. (Series 2026-1) catastrophe bond from the California Earthquake Authority (CEA) and every other cat bond ever issued in the extensive Artemis Deal Directory.
