The California Earthquake Authority (CEA) has now raised its target for fully-collateralized earthquake reinsurance from its latest catastrophe bond, the issuance, with now between $670 million and $770 million of limit sought, while the price guidance has been reduced for both tranches of notes.The CEA returned to the catastrophe bond market earlier this month, with an initial target to secure $600 million of reinsurance and with the potential for this new Ursa Re II cat bond to become one of the earthquake insurer’s largest cat bonds ever.This is the California Earthquake Authority’s third catastrophe bond of 2025, having successfully secured $400 million of reinsurance through the issuance in February and then a further $400 million of protection through the Ursa Re II Ltd.(Series 2025-1) in June.

The CEA currently has . But the CEA has $505 million of its catastrophe bonds that mature at the end of November 2025, so this new deal now looks set to meaningfully replace that limit.This latest Ursa Re II cat bond will become .With the upsizing that is targeted, this Ursa Re II 2025-3 cat bond could now become the third largest in the CEA’s long history of utilising catastrophe bonds to augment and diversify its reinsurance arrangements.

When this deal was launched it was at first targeted to secure $600 million of earthquake reinsurance limit for the CEA, but we’re now told the target size has risen to between $670 million and as much as $770 million of limit.At the same time, in line with the price developments being seen in the market, both tranches of notes on offer have seen their price guidance lowered, we understand.The Ursa Re II Series 2025-2 cat bond notes will provide the CEA with an up to four year source of fully-collateralized California earthquake reinsurance protection, on an indemnity trigger and annual aggregate basis.

What was a $200 million Series 2025-2 Class E tranche of notes are now targeted to provide $270 million of reinsurance across a four year term.They have an initial expected loss of 3.28% and were first offered to investors with price guidance in a range from 5.25% to 6%, but that has now fallen to a new range of between 5% and 5.25%, sources said.What was a $400 million Series 2025-2 Class FG tranche of notes are now targeted to be between $400 million and $500 million in size.

These notes have an initial expected loss of 4.81% and were first offered to investors with price guidance in a range from 7.75% to 8.5%, but the guidance has now been fixed at the low-end of 7.75%.All of which suggests the CEA is well on-track to secure one of its largest catastrophe bond sponsorships in history, to provide more reinsurance than originally targeted from the capital markets and at lower pricing than the initial guidance.You can read all about this new catastrophe bond from the California Earthquake Authority (CEA) and every other cat bond ever issued in the extensive Artemis Deal Directory..

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