Allied Trust Insurance Company has now secured its targeted $100 million of fully-collateralized named storm reinsurance protection from the capital markets through its second catastrophe bond sponsorship, with the Sabine Re Ltd. (Series 2026-1) issuance now priced, Artemis has learned.
The initial target was to secure $100 million of named storm reinsurance covering the states of Texas, North Carolina, South Carolina and Louisiana, similar to its first Sabine Re Ltd. (Series 2024-1) transaction.
Now, we’ve learned that the insurer has successfully priced its second cat bond sponsorship, securing the targeted protection at reduced pricing.
Sabine Re Ltd. will now issue and sell to investors a single $100 million tranche of Series 2026-1 Class A cat bond notes that will provide Allied Trust with a three-year source of named storm reinsurance protection, covering losses in the states of Texas, North Carolina, South Carolina and Louisiana, on an indemnity trigger and per-occurrence basis over a four-year term.
During the marketing of this cat bond the layer it will cover was adjusted, with the exhaustion point being reduced.
As a result, the final risk metrics for the notes are that the Sabine Re Ltd. Series 2026-1 Class A notes will cover a share of Allied Trust’s losses from an attachment point of $25 million, up to exhaustion at $125 million.
As a result, the Class A notes will have the same initial attachment probability of 1.4%, but a slightly adjusted higher initial base expected loss of 0.99%.
Initially the notes were offered to cat bond investors with price guidance for a risk interest spread in a range from 5.5% to 6.25%.
We’re now told that the $100 million of notes will pay investors an initial risk interest spread of 5.5%, so at the bottom end of the guidance range.
As a comparison, Allied Trust’s first Sabine Re 2024-1 cat bond came with an initial expected loss of 1.48% and priced to pay investors a spread of 8.25%.
It’s encouraging to see Allied Trust spreading its catastrophe bond coverage through its reinsurance tower and staggering the maturities of its issuances, showing another sponsor becoming increasingly familiar with these multi-year reinsurance structures.
You can read all about this new Sabine Re Ltd. (Series 2026-1) catastrophe bond and every other cat bond transaction ever issued in the extensive Artemis Deal Directory.
