SageSure gets upsized $100m Gateway Re 2023-2 at below-guidance price


Coastal property managing general underwriter SageSure’s latest catastrophe bond, the Gateway Re Ltd. (Series 2023-2) deal, has now been finalised to provide an upsized $100 million of reinsurance for the SureChoice and Elevate reciprocal exchanges, while the notes priced below the initial guidance, we’re told.

As we reported earlier in May, this is already the third catastrophe bond issuance of 2023 to benefit underwriting entities linked to SageSure.

This new Gateway Re 2023-2 cat bond will provide a source of catastrophe reinsurance to support the SureChoice Underwriters Reciprocal Exchange and the Elevate Reciprocal Exchange, two of the SageSure linked underwriting entities.

The notes will provide those reciprocal exchanges with a single wind season of reinsurance, covering second and subsequent event losses from named storms affecting the US states of Alabama, North and South Carolina, Louisiana, Mississippi, and Texas to December 2023, on an indemnity trigger and per-occurrence basis.

The initial target was for the single tranche of Series 2023-2 Class C notes to provide $75 million in reinsurance.

But, we’re now told that revised and upsized target amount of $100 million was secured at pricing.

The now confirmed to be $100 million of Class C notes have an initial base expected loss of 0.8% and were first offered to cat bond investors with price guidance in a range from 89% to 90% of principal (a rough coupon equivalent would be between 10% and 11% therefore).

As we later reported, that price guidance was updated, to between 90% and 91% of principal (a rough coupon equivalent would be between 9% and 10% therefore).

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We’re now informed that the notes priced at 91.5% of the original principal amount, which would be a rough spread equivalent of 8.5%.

SageSure continues to place the capital markets at the heart of the reinsurance arrangements for its underwriting entities, with now $730 million of collateralized capacity secured through the four Gateway Re cat bond deals sponsored in just one year.

You can read all about this new Gateway Re Ltd. (Series 2023-2) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.

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