Price guidance has been lowered again for the latest catastrophe bond for the Massachusetts Property Insurance Underwriting Association (MPIUA), with the range of spreads on offer reduced a second time for both tranches of the $150 million Mayflower Re Ltd. (Series 2026-1) issuance, Artemis understands.
Then, we reported last Friday that while the target size for this new Mayflower Re 2026-1 catastrophe bond remains unchanged at $150 million, the MPIUA was looking to capitalise on strong price execution in the cat bond market, with the price guidance lowered for both of the tranches of notes on offer.
Now, we’ve learned that the price guidance for each tranche of notes has been lowered a second time, as the MPIUA aims to secure even more attractive price execution for its latest cat bond sponsorship.
The MPIUA was last in the market in 2025, securing $225 million of reinsurance from the offering.
You can read about all of the MPIUA’s catastrophe bonds in our extensive Deal Directory.
Mayflower Re Ltd., a Bermuda-based special purpose insurance vehicle, is still offering investors two tranches of Series 2026-1 notes, each equally sized to provide the MPIUA with $75 million of reinsurance protection across different layers of its reinsurance tower.
The cat bond provide the MPIUA with a multi-year source of indemnity based and annual aggregate reinsurance covering losses from Massachusetts named storms, severe thunderstorms and winter storms, running across a three-year term and three annual risk periods until the end of June 2029.
Similar to other cat bonds the MPIUA has sponsored in recent years, in order for a loss event to qualify it must breach a $10 million ultimate net loss deductible.
The still $75 million Series 2026-1 Class A tranche of notes come with an initial base expected loss of 1.788%. They were first offered to investors with spread price guidance in a range from 4% to 4.5%, which fell to 3.5% to 4% at the first update. We’re now told the guidance has been lowered further to between 3% and 3.5%.
The also still $75 million Series 2026-1 Class B tranche of notes are riskier, coming with an initial base expected loss of 2.598%. They were initially marketed to investors with spread price guidance in a range from 4.75% to 5.25%, which fell to 4.25% to 4.75% at the first update. Now, we understand that the guidance has fallen a second time, to a range of 3.75% to 4.25%.
For comparison, last year’s single tranche of Mayflower Re 2025-1 cat bond notes came with an initial expected loss of 0.901% and priced to pay investors a spread of 3.5%.
This year’s cat bond sponsorship looks likely to settle at a very attractive pricing level for the MPIUA, as the residual market insurer is set to be another to benefit from the keen rates cat bond coverage is being secured at today.
You can read all about this new Mayflower Re Ltd. (Series 2026-1) catastrophe bond and every other cat bond transaction issued since the market began in the Artemis Deal Directory.
