CEA now targets up to $425 million worth of earthquake reinsurance through Sutter Re 2026-1 bonds

The California Earthquake Authority (CEA) has raised the target size of its latest catastrophe bond sponsorship for the second time, and is now seeking up to $425 million of fully collateralized earthquake reinsurance protection from Sutter Re Ltd. (Series 2026-1), and can inform Artemis. The California Earthquake Authority (CEA) launched this new offering in early May and was originally targeting $300 million of fully collateralized earthquake reinsurance from the capital markets through its new Sutter Re Series 2026-1 catastrophe bonds.

As we reported last week, CEA was aiming to increase the size of the Sutter Re 2026-1 cat bond issue with a 33% volume target increase and $400 million of protection required from the deal, while at the same time lowering the price guidance.

Now, in a further update to the size and pricing of the new cat bonds, the CEA has raised the target size of the offering for a second time, with up to $425 million of seismic-collateralised reinsurance now capping the new target.

At the same time, the guidance price for each tranche of the Sutter Re Series 2026-1 Cat Notes on offer has been lowered further, we understand.

Which means CEA is now targeting up to $425 million of cap across the two tranches of cat bonds on offer, which will provide the insurer with a four-year source of fully collateralized reinsurance protection against the California earthquake on an indemnity and annual aggregate basis.

What was initially a $200 million tranche of Series C Notes 2026-1 was first raised in size to $300 million, but has now been increased further with a new target of up to $325 million of reinsurance limit.

The Class C bonds come with an expected initial loss of 2.30% and were first offered to cat bond investors with price guidance in a range of 4.25% to 5%. As we reported, this amount was initially reduced to a revised range of 3.75% to 4.25%, but has now been reduced to between 3.5% and 3.75%, sources said.

The second tranche of the 2026-1 Series F Notes remains at $100 million.

The Series F bonds come with an expected initial loss of 4.05% and were first offered to cat bond investors with price guidance in a range of 6.5% to 7.25%. This was later reduced to a revised range of 5.75% to 6.5%, but we are told it has now been reduced to between 5.5% and 5.75%.

CEA is targeting a strong price execution for its latest catastrophe bond deal, looking to capitalize on strong investor demand and an abundance of capital in the market.

The California Earthquake Authority (CEA) is a very consistent catastrophe bond sponsor, and this marks the 24th cat bond sponsorship we have tracked from the company.

View details of all CEA-sponsored catastrophe bonds in the Artemis Deals Guide.

You can read all about Sutter Re Ltd’s new catastrophe bonds. (Series 2026-1) from the California Earthquake Authority (CEA) and every other cat bond ever issued in the comprehensive Artemis Deal Guide.

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