CEA looks for $150m+ of quake reinsurance with Ursa Re II 2021 cat bond

CEA looks for $150m+ of quake reinsurance with Ursa Re II 2021 cat bond

The California Earthquake Authority (CEA) is back in the catastrophe bond market with its first deal of 2021, seeking at least $150 countless totally collateralized earthquake reinsurance defense through this Ursa Re II Ltd. (Series 2021-1) issuance.The California Earthquake Authority (CEA) is among the bigger sponsors of disaster bonds, collateralised reinsurance and insurance-linked securities (ILS), which are all key sources of protection within its reinsurance program arrangements.
The CEAs reinsurance and disaster bond risk transfer program reached a new high at nearly $9.6 billion in size in October 2020, however then shrank slightly after some growing cat bond protection to $9.15 billion since December 2020.
As we described at the time in December, a new disaster bond was likely, as the CEA restored a substantial quantity of its reinsurance security in January, so a visit to the capital markets was also most likely.
Now, that visit to the capital markets has actually started, with what will be the ninth cat bond to be sponsored under an Ursa Re name by the CEA and the fourteenth catastrophe bond with the California Earthquake Authority listed as the direct sponsor in our Deal Directory.
For this issuance, the CEA is using its Bermuda-based special function insurance company named Ursa Re II Ltd
. Ursa Re II Ltd. will provide a single Series 2021-1 Class F tranche of notes, with a target issuance size of at least$150 million we comprehend. The single tranche of notes will be sold to third-party ILS investors and funds, with the proceeds utilized to collateralize a hidden earthquake retrocessional reinsurance arrangement in between Ursa Re II Ltd. and delivering reinsurer Swiss Re, which in turn participates in a reinsurance arrangement with the CEA.
The notes will provide the CEA with a minimum of $150 countless California earthquake reinsurance security across a roughly three-year 9 month term, with the cover delivered on a yearly aggregate and indemnity trigger basis.
The uncommon term appears to be developed to bring this most current CEA feline bond into line with a few of its other sources of defense maturity dates.
We comprehend that the $150 countless Class F notes from this Ursa Re II 2021-1 cat bond issuance, will have a preliminary anticipated loss of 3.74% and are being marketed to ILS financiers with price guidance in a range from 6.75% to 7.25%.
The reinsurance security from these feline bond notes will sit throughout a $500 million layer of the CEAs program, attaching at $2.1 billion of losses to start, were informed.
Well keep you upgraded as this new Ursa Re II Ltd. (Series 2021-1) catastrophe bond issuance from the California Earthquake Authority (CEA) pertains to market.
You can read everything about this brand-new transaction and every other catastrophe bond issued in the Artemis Deal Directory.

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