Oak Global, the specialist Lloyd’s underwriting company, has now raised the target size for its debut catastrophe bond sponsorship, with retrocessional protection from the Arthur Re Ltd. – Quercian Re 2026-1 cat bond issuance now expected to fall between $125 million and as much as $150 million, Artemis understands.
As we’ve explained before, this offering is being issued by Arthur Re Ltd., a Bermuda domiciled unrestricted special purpose insurer (SPI) managed by Artex that was established last year as a multi-cedant platform for efficient issuance of index trigger cat bond deals.
Arthur Re Ltd. was initially offering a $75 million tranche of notes on behalf of its segregated account named Quercian Re 2026-1.
We now understand that target has been raised to between $125 million and as much as $150 million, while at the same time, the price guidance of the notes on offer has been adjusted to a tighter spread.
These Quercian Re 2026-1 notes are designed to provide a source of fully-collateralized, multi-year and multi-peril retrocession from the capital markets, to provide a source of protection to Syndicate 2843, which is acting through its managing agent Polo Managing Agency.
The cat bond notes will also provide the Oak linked Syndicate 2843 at Lloyd’s with a source of retrocessional reinsurance protection against losses from US and Canada named storms and earthquakes, as well as US wildfire events, that will be structured on an annual aggregate and industry loss trigger basis, that will run across a three year term to the end of May 2029.
However, while the Oak Reinsurance Syndicate 2843 is the ceding company to this Arthur Re Ltd. – Quercian Re 2026-1 cat bond, it is possible that the protection will benefit broader Oak Global portfolios as well.
The now targeted between $125 million and $150 million of Quercian Re 2026-1 cat bond notes will feature a $15 million franchise deductible, while their attachment point is at $240 million of aggregate losses and exhaustion at $365 million. Which gives these notes an initial attachment probability of 4.6%, and an initial expected loss of 3.29%.
Initially, these notes were being offered to cat bond investors with price guidance for a spread of between 7.25% and 8%.
We’re now told that the price guidance has been updated to a tighter spread of 7% to 7.5%, showing pricing is likely to fall at the low-end of initial guidance or below that level.
Finally, should this cat bond upsize to the maximum $150 million target, it suggests the exhaustion point would also need to rise commensurately higher given the layer of the reinsurance tower was initially said to be just $125 million wide from attachment to exhaustion.
Oak Global is well on-track to secure a much larger catastrophe bond sponsorship than initially planned during its first appearance in the market, while the pricing looks set to be towards the lower-end of initial guidance, or perhaps even below that range.
As a reminder, you can read all about this new Arthur Re Ltd. – Quercian Re 2026-1 catastrophe bond and every other cat bond transaction in the Artemis Deal Directory.
