GeoVera Nova insurance entities have now secured the targeted $350 million of US earthquake reinsurance protection from the new Veraison Re Ltd. (Series 2026-1) catastrophe bond at slightly lower pricing than initially projected, Artemis has learned.
The transaction launched to investors earlier this month, with an initial target to secure the aforementioned $350 million of fully-collateralized reinsurance protection backed by collateral from the sale of the cat bond notes that are now priced.
The size of the issuance did not change, with the notes now having priced to provide the targeted coverage.
But, as we reported in an update as the deal made its way to market, the sponsors sought stronger execution, with a slight reduction in the spreads on offer for each of the two tranches of Series 2026-1 notes that Veraison Re will now issue.
With the notes now priced at the end of last week, the GeoVera insurers have secured the reinsurance at better than initially forecast pricing, we are told.
You can find details of all the Veraison Re catastrophe bonds in our extensive Deal Directory.
With the transaction now finalised, Bermuda licensed special purpose insurer (SPI) Veraison Re Ltd. will issue two tranches of Series 2026-1 catastrophe bond notes, amounting to an issuance size of $350 million.
The notes sale to investors will provide the collateral to support a source of US earthquake reinsurance protection from the capital markets starting from March 1st, to cover GeoVera’s insurance underwriting entities, GeoVera Insurance, GeoVera Specialty Insurance Services, and Coastal Select.
The earthquake reinsurance protection from this Veraison Re 2026-1 catastrophe bond is structured to protect these insurers on an indemnity trigger and per-occurrence basis, over a roughly three-year term.
The $200 million tranche of Series 2026-1 Class A notes come with an initial expected loss of 0.75%. They were first offered with price guidance for an initial risk interest spread in a range from 2.75% to 3.25%, which later narrowed to between 2.75% and 3%. We’re now told final pricing was for a spread of 2.9%, so within the lower-half of initial guidance.
The $150 million tranche of Class B notes come with an initial expected loss of 2.56%. These were first offered with price guidance in a range from 4.25% to 4.75%, which was then updated at between 4% and 4.25%. We’re told final pricing for these notes was for a spread of 4.15%, so slightly below the original guidance range.
Meaning the reinsurance protection has been secured with attractive deal execution for the GeoVera sponsoring insurers, as they extend their US earthquake reinsurance protection through the catastrophe bond market.
As we explained in our first article on this issuance, a $150 million Veraison Re Ltd. (Series 2023-1) cat bond will mature at the start of March 2026, with this new deal now set to both renew and extend that US earthquake reinsurance protection for GeoVera.
The company also has $175 million Veraison Re Ltd. (Series 2024-1) and $450 million Veraison Re Ltd. (Series 2025-1) catastrophe bonds still in-force to protect the GeoVera underwriting entities, to which it will now add $350 million of protection from this Series 2026-1 issuance.
As a result, once this new 2026-1 issuance settles the Veraison Re series of deals will provide the cedents $1.125 billion of reinsurance and after the 2023 issuance matures in March that will drop to $975 million, so a decent increase on the sponsors cat bond backed quake protection thanks to this latest deal.
You can read all about this Veraison Re Ltd. (Series 2026-1) catastrophe bond in the extensive Artemis Deal Directory that includes details on almost every cat bond ever issued.
