The California Earthquake Authority (CEA) has returned to the disaster bond market to sponsor its first issuance since late 2023, searching for $200 million or extra in multi-year collateralized California earthquake reinsurance safety from the capital markets by way of this Ursa Re Ltd. (Sequence 2025-1) issuance.

However, since then with the CEA’s publicity base having declined, so has its want for reinsurance, which resulted in a shrinking of its danger switch tower, as we’ve reported.
So it’s encouraging to see them again and this can be the twenty first disaster bond sponsored by the California Earthquake Authority (CEA) that now we have listed in our Deal Listing.
The CEA nonetheless has $2.055 billion of cat bond backed reinsurance in-force at the moment, our disaster bond sponsor leaderboard reveals, after a $215 million Ursa Re II 2021-1 Class F notes issuance matured on the finish of November.
Of that, $245 million of the CEA’s Ursa Re in-force cat bonds mature in June 2025 and an additional $505 million in December.
The CEA is utilizing its Ursa Re Ltd. particular function insurer (SPI) in Bermuda for this new cat bond deal, searching for $200 million or extra in earthquake reinsurance from the issuance of a single Sequence 2025-1 tranche of notes, we perceive from sources.
The CEA is once more straight going through Ursa Re for this new cat bond, one thing which began with its late 2023 deal, having beforehand partnered with a worldwide reinsurance agency it used to entrance the capital markets for it.
The Ursa Re Sequence 2025-1 cat bond notes will present the CEA with a three-year supply of California earthquake reinsurance safety, on an indemnity set off and annual combination foundation, we perceive.
A presently $200 million tranche of Class F notes are being issued and can present protection throughout a $500 million layer of the CEA’s danger switch tower, whereas having a $2.1 billion retention in place for the primary loss prevalence interval, we’re instructed.
The Class F notes will include an preliminary attachment likelihood of 4.38%, an preliminary anticipated lack of 4.05% and they’re being provided to traders with worth steering in a variety from 6.75% to 7.5%, sources defined.
As stated, it’s good to see the CEA again available in the market after a bit of time away. Whereas the insurer’s publicity base remains to be fluctuating, it clearly recognises the advantages of multi-year and fully-collateralized reinsurance that its disaster bonds present.
As we additionally reported this week, the CEA is discussing whether or not a second or subsequent occasion funding tower is required, to assist is maintain operations after a significant earthquake occasion, which may additionally incorporate extra reinsurance and cat bonds.
You may learn all about this new Ursa Re Ltd. (Sequence 2025-1) disaster bond from the California Earthquake Authority (CEA) and each different cat bond ever issued within the in depth Artemis Deal Listing.