SageSure carriers’ Gateway Re II Ltd. cat bond upsized to $125m

The Gateway Re II Ltd. (Series 2023-1) catastrophe bond, that will provide its reinsurance protection to two more of the insurance carriers linked to coastal property managing general underwriter SageSure, is set to upsize to $125 million, while its pricing has tightened towards the lower-end of guidance.

SageSure is already known in the cat bond market for catastrophe bonds to benefit its SureChoice Underwriters Reciprocal Exchange (SURE), through two Gateway Re Ltd. issuances, the most recent being in February 2023.

But this Gateway Re II Ltd. catastrophe bond hit the market in March, with SageSure looking for reinsurance from the capital markets for two other carriers, SafePort Insurance Company and SafeChoice Insurance Company.

This first Gateway Re II Ltd. cat bond was targeting $100 million of protection for the carrier pair, through the issuance a single tranche of Series 2023-1 Class A notes.

These notes will provide US named storm reinsurance for the states of Alabama, Louisiana, Mississippi, New York, North Carolina, South Carolina, Texas, and Virginia, across a three-year period on an indemnity trigger and per-occurrence basis, to the two ceding insurers, SafePort and SafeChoice.

Now, we’ve learned that the target issuance size has been increased to $125 million.

At the same time, the Class A notes, which come with an initial expected loss of 1.4%, were first offered to cat bond funds and investors with price guidance in a range from 9.5% to 10.25%.

We’re now told that this price guidance has been narrowed and lowered to between 9.5% and 9.75%.

For two debut cat bond sponsors an upsizing and pricing towards the lower-end of guidance can be considered a strong result, as well as a further demonstration of investor demand.

You can read all about this new Gateway Re II Ltd. (Series 2023-1) catastrophe bond and every other cat bond issuance since the market began in our extensive Deal Directory.