CEA lifts Ursa Re 2023-2 cat bond upper target 53% to $230m


The California Earthquake Authority (CEA) has increased the target size for its new Ursa Re Ltd. (Series 2023-2) earthquake catastrophe bond transaction, with now as much as $230 million in collateralized reinsurance sought from the issuance.

At that size it would represent a roughly 53% increase to the deal volume, while at the same time the pricing is set to come in within the lower-half of guidance.

The California Earthquake Authority (CEA), one of the most consistent sponsors of catastrophe bonds for its reinsurance needs, returned to the market with this new Ursa Re 2023-2 cat bond in late September.

When it was launched to investors, the CEA was seeking $150 million of collateralized California earthquake reinsurance from its latest cat bond.

Now, we’re told the target size for this issuance has been lifted to between $200 million and $230 million, at the top-end of which it would represent a roughly 53% upsizing of the new cat bond.

This Ursa Re 2023-2 cat bond will provide the CEA with a source of California earthquake reinsurance protection, on an indemnity and annual aggregate basis, across a just over three-year period, to the end of November 2026, with three loss occurrence periods.

The now up to $230 million of Class E notes being offered would attach when the CEA’s aggregated qualifying losses reach $3.024 billion or above during a loss occurrence period, covering a share of the losses within a $500 million layer of its reinsurance tower.

At launch, the notes which have an initial expected loss of 3.28% were offered to cat bond investors with price guidance in a range from a spread of 9% to 9.75%.

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We’re now told that the spread guidance has been fixed at 9.25%, so within the lower-half of the range.

This would imply slightly keener pricing than the last Sutter Re cat bond from the CEA, which had a similar expected loss and priced with a spread of 9.75%.

There are now 19 catastrophe bonds listed in our Deal Directory that have been directly sponsored by the California Earthquake Authority (CEA).

You can read all about this new Ursa Re Ltd. (Series 2023-2) catastrophe bond from the California Earthquake Authority (CEA) and every other cat bond ever issued in the extensive Artemis Deal Directory.

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