By Isha Marathe

April 8 - (The Insurer) - California homeowners MGA Bamboo and its fronting carrier Sutton National have renewed Bamboo's reinsurance program, which involved the closing of the Greengrove Re Ltd Series 2025-1 catastrophe bond and the execution and funding of the Greenshoots Re Ltd Series 2025-1 sidecar transaction.

Program Manager had reported last month that Bamboo and Sutton National were working on the reinsurance program, which would include an upsized cat bond and sidecar.

Greengrove Re issued a $100 million catastrophe bond with a spread of 7.75%, an initial base expected loss of 1.44%, and an indemnity trigger over a three-year term with a scheduled maturity date of April 7, 2028.

The bond was upsized 33% from its $75 million placement target.

Greengrove Re offers protection against fire and fire following earthquake for business written by Bamboo on behalf of Sutton National, and provides both parties with a diversified source of catastrophe excess of loss capacity through the capital markets.

Additionally, Greenshoots Re issued $70 million of preference shares for a sidecar transaction supported by several institutional investors.

GC Securities, a division of MMC Securities, acted as the sole structuring agent and bookrunner for the catastrophe bond and the sole structuring agent and placement agent for the sidecar.

Bermudian investment holding company White Mountains purchased a 73% stake in Bamboo for up to $323 million in cash in January 2024, including a capital injection to support growth at the MGA.

"We are very pleased that investors strongly supported these transactions following the recent Los Angeles wildfires, which we believe reflects a recognition of Bamboo's unique business model and sound approach to catastrophe risk management," said Liam Martens, managing director of GC Securities.

Sources familiar with the reinsurance placement told Program Manager in March that Bamboo has reported a $150 million gross loss to its capacity providers for the wildfires that struck California in January 2025,

The gross loss has gone around halfway through the catastrophe XoL tower on the expiring program, which provided approximately $300 million of limit, Program Manager reported.

"The catastrophe bond and the sidecar are an essential part of our reinsurance structure and complement a catastrophe excess of loss tower and quota share panel backed by industry-leading reinsurers," said Shane Haverstick, CEO of Sutton National.

"We are pleased to have successfully sponsored our first catastrophe bond and sidecar, and done so in partnership with Bamboo, our valued partner in the California homeowners' market. We are grateful for the strong investor support across both transactions."

Willkie Farr & Gallagher served as deal counsel for both transactions.