Zenkyoren, the Japanese National Mutual Insurance Federation of Agricultural Cooperatives, continues to target $100 million or more in aggregate Japan earthquake reinsurance from its latest catastrophe bond, but we’re told the price guidance for the new Nakama Re Pte. Ltd. (Series 2025-1) issuance has now tightened towards the lower-end of initial guidance.
Zenkyoren continues to be the buyer of one of the largest catastrophe reinsurance towers in the world and has been accessing the capital markets using catastrophe bonds since 2003.Zenkyoren returned to the catastrophe bond market in late March, for what will become its fifteenth issuance to date that we have listed in our extensive Deal Directory.
Zenkyoren is again utilising its Singapore domiciled special purpose reinsurance vehicle to issue its latest catastrophe bond.
The organisation first sponsored a cat bond out of Singapore in 2021, after which it then used its Bermuda SPI in 2023, but then used Singapore again in 2024 and now again in 2025.
The company’s target is to secure Japanese earthquake reinsurance protection structured on a three-year aggregate, indemnity triggered basis, across a roughly five year term to mid-April 2030, with three annual aggregate risk periods, each three-years in length, that overlap across the full term.
Again, like its other recent catastrophe bonds, Zenkyoren seeks reinsurance protection that includes coverage for losses from Japanese earthquake shake and related perils, including tsunami’s, fire, flooding and sprinkler leakage.
The targeted $100 million tranche of Series 2025-1 Class 1 notes that Nakama Re Pte. is offering will have an initial attachment point of JPY 2.15 trillion of losses and cover a layer to JPY 2.4 trillion, which is a layer above Zenkyoren’s 2023 and 2024 cat bonds, but sits next to a 2021 issuance.
As we previously reported, the notes will sit within a JPY 250 billion layer of the Zenkyoren reinsurance tower and also feature an aggregate franchise deductible of JPY 270 billion, the same as recent deals.
The Series 2025-1 Class 1 notes will have an initial annualised attachment probability of 0.77%, an initial annualised expected loss of 0.74% and were first offered to cat bond investors with spread price guidance in a range from 2% to 2.5%.
Now, sources have told us that the pricing is falling towards the lower-end of guidance, with the notes now being offered with a tightened range of 2.1% to 2.25%.
As a result, it looks like Zenkyoren could secure its fifteenth catastrophe bond coverage priced within the lower-end of guidance, once again reflecting elevated investor demand for new issues and the recent strong execution of deals being seen in the marketplace.
You can read all about this Nakama Re Pte. Ltd. (Series 2025-1) catastrophe bond and every other cat bond transaction in the Artemis Deal Directory.
