The California Earthquake Authority (CEA) is looking to upsize its latest catastrophe bond sponsorship, with the target raised one-third to $400 million of fully-collateralized earthquake reinsurance protection from this Sutter Re Ltd. (Series 2026-1) issuance, Artemis has learned.
Last year, the CEA successfully sponsored three series of catastrophe bonds, securing the company in total $1.57 billion of earthquake reinsurance protection from the cat bond market.
For its first cat bond sponsorship in 2026, the CEA is utilising its Sutter Re Ltd. issuer, which has not been seen in the market since a 2023 cat bond deal, with the company having used vehicles named Ursa Re for all cat bonds sponsored since then.
View details of every catastrophe bond sponsored by the CEA in the Artemis Deal Directory.
For this Sutter Re Series 2026-1 issuance, the CEA was initially targeting $300 million of fully-collateralized earthquake reinsurance from the capital markets.
Now, we’re told that the target size of the this Sutter Re Ltd. (Series 2026-1) cat bond issuance has been increased by 33%, with the CEA now aiming to secure $400 million of protection from the deal.
At the same time, unsurprisingly given the softened state of cat bond pricing and high levels of investor appetite, the guidance on the risk interest spreads for the two tranches of notes on offer has been reduced.
As a result, with this cat bond the CEA is now seeking $400 million of limit across the two tranches of cat bond notes on offer, which will provide the CEA with a four year source of fully-collateralized California earthquake reinsurance protection on an indemnity trigger and annual aggregate basis, like all of the CEA’s cat bonds have done.
What was a $200 million tranche of Series 2026-1 Class C notes are now offered at $300 million in size. The Class C notes comes with an initial attachment probability of 2.43%, and an initial expected loss of 2.30%.
Initially these notes were offered to cat bond investors with price guidance in a range from 4.25% to 5%, but we are now told this has been lowered to a revised range of 3.75% to 4.25%.
Also on offer is a still targeted $100 million Series 2026-1 Class F tranche of notes that come with an initial attachment probability of 4.31%, and an initial expected loss of 4.05%.
These notes were originally offered to cat bond investors with price guidance in a range from 6.5% to 7.25%, but that has also been reduced to a revised range of 5.75% to 6.5%.
The CEA is benefiting from the strong catastrophe bond investor appetites and market conditions we’re currently seeing across the market, now looking likely to both upsize and perhaps meaningfully price down its latest cat bond deal.
As a reminder, you can read all about this new Sutter Re Ltd. (Series 2026-1) catastrophe bond from the California Earthquake Authority (CEA) and every other cat bond ever issued in the extensive Artemis Deal Directory.
