SageSure gets upsized $150m Gateway Re 2025-2 cat bond at low-end pricing
Artemis has learned that SageSure, the coastal property managing general underwriter, has now successfully priced its latest catastrophe bond, securing the 20% upsized $150 million in named storm reinsurance sought from the Gateway Re Ltd. (Series 2025-2) issuance that will protect the Aurous and Elevate reciprocal exchanges.
At the same time as securing the upsized amount of reinsurance, the notes have now been priced to pay cat bond investors a spread in the lower half of the initially offered range.
SageSure returned to the catastrophe bond market at the start of March with its latest Gateway Re cat bond deal, which will be its eleventh in the series.
Initially, SageSure was seeking $125 million in named storm reinsurance protection from the capital markets for the two reciprocal exchange underwriting entities.
But, in our first update on this deal, we revealed that SageSure’s size target for this cat bond issuance had increased, while the price guidance had narrowed, but still remained within the initial range that had been originally offered.
Now, we’ve learned that the increased size target was achieved at the low-end of the updated guidance, with this Gateway Re 2025-2 catastrophe bond now set to provide SageSure $150 million in named storm reinsurance protection for the two reciprocal exchange underwriting entities.
As we previously explained, in the past the Elevate Reciprocal Exchange had purchased its own reinsurance tower in recent years, but for the upcoming mid-year renewals Elevate and the Auros Reciprocal Insurance Exchange will have a combined reinsurance tower, so this catastrophe bond cover will become a component of it.
The Gateway Re 2025-2 Class A cat bond notes will provide US named storm reinsurance, initially for the states of Louisiana, Mississippi, South Carolina and Texas, to the SageSure reciprocals on an indemnity trigger and per-occurrence basis across a three year term, from July 2025 to the end of June 2028.
The $150 million in Series 2025-2 Class A notes that Gateway Re will now issue come with an initial expected loss of 1.86%.
The notes were first offered to cat bond investors with price guidance in a range from 6.75% to 7.5%, but that was later updated to a narrower 7% to 7.25%, and we’re now told the pricing has been finalised at the low-end for a spread of 7%, so within the lower half of the initially offered range.
This is another good result for SageSure, as the company has benefited from the strong price execution in the cat bond market to secure a meaningful $150 million in named storm reinsurance protection, at attractive pricing.
This also comes right on the heels of SageSure closing its largest issuance yet, following the $520 million Gateway Re 2025-1 cat bond being settled, becoming the largest yet for underwriting entities owned by or linked to coastal managing general underwriter (MGU) SageSure.
SageSure-linked underwriting entities benefit from more than $2 billion of catastrophe bond protection, as shown in our cat bond sponsor leaderboard. Once this new cat bond settles, in the first week of April, SageSure will move up that list and into the top-5 of sponsors.
You can read all about this new Gateway Re Ltd. (Series 2025-2) catastrophe bond and every other cat bond deal in the Artemis Deal Directory.
