Everest Re, the global reinsurance unit of Everest Group, has returned to the catastrophe bond market in search of at least $530 million of multi-peril collateralized North America focused retrocession with three and four year tenure Kilimanjaro III Re Ltd. (Series 2026-1) and Kilimanjaro III Re Ltd. (Series 2026-2) transactions, Artemis can report.
That was the second time Everest had secured over a billion dollars of retrocession limit from the cat bond market in a single visit, having also done so back in 2017.
Now, the company has returned and it is again bringing two series of catastrophe bond notes to market at the same time, one targeting three years of protection and the other four years. All notes are targeting lower-layer coverage than last year’s 2025 cat bond, so the risk levels are commensurately higher.
We’re told that Everest’s initial goal is to secure at least $530 million of limit across the two series. How that splits over the two remains to be seen, but as ever with the re/insurer’s cat bonds there will be room to upsize if the investor response is conducive to do so.
It’s worth noting that when a catastrophe bond sponsor brings an issuance to market featuring multiple series, there is always a chance only one gets placed as well, depending on investor response to the transactions.
The only difference between the two series are the term of coverage, with the Kilimanjaro III Re Ltd. (Series 2026-1) notes targeting three years of coverage and Kilimanjaro III Re Ltd. (Series 2026-2) notes targeting four years of coverage for Everest Re.
Within each series there are four tranches, two targeting annual aggregate protection and two targeting retro on a per-occurrence basis for the sponsor.
As a result, these latest catastrophe bonds from Everest look set to provide it with additional broad multi-peril peak natural catastrophe retrocession.
These latest Kilimanjaro III Re deals will become the sixteenth and seventeenth series of catastrophe bonds sponsored by Everest Re that we have tracked and listed in our Deal Directory, since the reinsurers first in 2014.
Details of every catastrophe bond sponsored by Everest Re can be found here.
The way these new cat bonds are structured and the coverage they will provide are similar to the issuances from 2025 for Everest, the main differentiator being that last year the re/insurer sponsored issuances of four and five year duration notes under Kilimanjaro II Re (this year three and four year under Kilimanjaro III Re).
We are told that Bermuda-based special purpose insurer (SPI) Kilimanjaro III Re Ltd. is offering four tranches of Series 2026-1 notes and four tranches of Series 2026-2 notes, that will all be sold to investors and the proceeds used to collateralize retrocessional reinsurance agreements with Everest Re.
The cat bond notes will collateralize coverage for Everest Re against certain losses from named storms and earthquakes that impact the United States, Puerto Rico, U.S. Virgin Islands, D.C., and Canada, the same perils as with all of its recent cat bond deals.
This retrocessional reinsurance protection will be structured on a regionally weighted industry-loss trigger basis for all four tranches of notes for each series, we are told.
Like last year’s deal, we understand that each series of notes will feature two tranches to provide annual aggregate protection and two tranches that are structured to provide Everest Re with a source of per-occurrence protection, so four aggregate and four occurrence tranches in all (if both series are issued and settled).
The four tranches of notes under Series 2026-1 will provide Everest Re with coverage for three years to the end of June 2029, while the Series 2026-2 four tranches of notes will provide four years of protection running to the end of June 2030, which aligns their maturities closely with the two series issued a year ago.
Everest Re has adopted this strategy with catastrophe bond sponsorships in the past, targeting different durations of coverage. Typically, this is considered a way to assist a sponsor with the staggering of maturities while layering coverage over longer term. In this case it does bring more maturities together, but remember they are still staggered over a year for Everest.
The new Kilimanjaro III Re Series 2026-1 notes will provide Everest Re with three years of coverage across A-1, B-1, C-1, and D-1 tranches, while the Kilimanjaro III Re Series 2026-2 notes will provide five years of coverage across A-2, B-2, C-2, and D-2 tranches.
While individual tranches do not have target sizes at this stage, like last year Everest is targeting a total amount of retro limit, which is currently the $530 million, across the two series and eight tranches, while there are specific size targets for the matching pairs of note classes with different durations.
The offering has a target of $50 million across the three year Series 2026-1 Class A-1 and four year Series 2026-2 Class A-2 notes. These notes are annual aggregate in their coverage structure, with a $700 million franchise deductible and attach at $3 billion. They come with an initial attachment probability of 5.15%, an initial base expected loss of 4.35% and they are being offered with price guidance in a range from 8% to 8.5%.
There is a $100 million target across the three year Series 2026-1 Class B-1 and four year Series 2026-2 Class B-2 notes. These notes are also annual aggregate in their coverage structure, with a $700 million franchise deductible but attach lower down at $1.9 billion. They come with an initial attachment probability of 9.29%, an initial base expected loss of 6.97% and they are being offered with price guidance in a range from 12.25% to 12.75%.
There is a $50 million target across the three year Series 2026-1 Class C-1 and four year Series 2026-2 Class C-2 notes. These notes will provide per-occurrence protection and attach at $2.365 billion. They come with an initial attachment probability of 6.19%, an initial base expected loss of 5.53% and they are being offered with price guidance in a range from 9% to 9.5%.
Finally, there is a $330 million target across the three year Series 2026-1 Class D-1 and four year Series 2026-2 Class D-2 notes. These notes will also provide per-occurrence protection, but attach lower down at $1.795 billion. They come with an initial attachment probability of 8.7%, an initial base expected loss of 7.38% and they are being offered with price guidance in a range from 12% to 12.5%.
For comparison, the riskier aggregate notes from last year’s $1 billion Kilimanjaro cat bond issuance had an initial expected loss of 2.84% and priced with a spread of 6.25%, while the riskier occurrence notes had an expected loss of 3.55% and priced at 6.5%.
Once again, with these eight tranches of notes, their different durations, coverage types and risk return-periods, Everest is looking to strategically layer more retrocession to protect its reinsurance business against peak North American catastrophe loss events.
As we’ve done before, we will split these two series issuances into separate entries in our Deal Directory, while for now we split the targeted $530 million of limit evenly across them.
As and when we receive any updated information on the sizes of individual tranches, we will update the entries accordingly.
Everest had $330 million of cat bond protection that matured in April, so this looks set to more than replace that, after which its next scheduled cat bond maturities are not until the end of June 2028.
Currently, Everest has $1.2 billion of catastrophe bond protection outstanding, according to the Artemis cat bond sponsor leaderboard.
So with this new offering, Everest will build its catastrophe bond protection to perhaps over $1.73 billion for the coming year at least if the target is hit or exceeded.
You can read all about the Kilimanjaro III Re Ltd. (Series 2026-1) and Kilimanjaro III Re Ltd. (Series 2026-2) catastrophe bond series from Everest Re and every cat bond transaction ever issued in the extensive Artemis Deal Directory.
