‘Catastrophe’ Bond Market Headed for Major Surge in Issuance

-- The market for catastrophe bonds, one of this year’s best-performing debt classes, is about to see a significant increase in sales as the World Bank, a major issuer, prepares to ratchet up its offering.China Repeats Its View That Israel Must Protect Civilians

“I think you’ll see us doing cat bonds beyond hurricanes, pandemics and earthquakes,” to include physical disasters like floods and droughts, Bennett said in an interview. Historically, investors in cat bonds have avoided such payouts most of the time. But of the roughly 30 cat bonds issued by the World Bank in the past decade, about half a dozen have been triggered, requiring investors to cover some or all of the damage against which the issuer sought to protect itself.

Jamaica is due to return to markets in December, when a $185 million hurricane cat bond matures. Colombia and Peru also are looking to tap the market, and there’s talk of a potential regional cat bond spread across Caribbean countries. Investors in cat bonds get access to portfolio diversification because their price movements are uncorrelated to those of stocks or other fixed-income instruments. And they’re useful for filling environmental, social and governance mandates from end investors.

If cat bond issuers want to entice investors to expose themselves to such risks, they’ll “have to increase their premiums,” Ineichen said.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stock market today: Wall Street drifts lower as pressure rises from the bond marketNEW YORK (AP) — Wall Street is drifting lower in early trading as pressure from the bond market continues to build. The S&P 500 was down 0.5% early Monday. The Dow lost 171 points, and the Nasdaq composite was off 0.6%.
Source: SooToday - 🏆 8. / 85 Read more »

Stock market today: Asian shares mostly rise after US stocks wobble as Treasury bond yields veerTOKYO (AP) — Shares mostly rose Tuesday in Asia after Wall Street wobbled to a mixed close as yields on U.S. Treasury bonds fell back after creeping above 5%...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

BOJ Wades Back Into Bond Market to Curb Rising Japanese YieldsThe Bank of Japan announced an unscheduled bond-purchase operation on Tuesday, underscoring its desire to curb the speed of increases in sovereign yields.
Source: BNNBloomberg - 🏆 83. / 50 Read more »

Bill Ackman, Bill Gross comment on U.S. economy, bond marketActivist investor Bill Ackman announced his firm has closed its short on bonds as Treasury yields flirt with 5%. Fund manager Bill Gross also issued a...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »

The 5% Bond Market Means Pain Is Heading Everyone’s Way (Repeat)(Bloomberg) -- Not so long ago, families, businesses and governments were effectively living in a world of free money.Most Read from BloombergUS Push for...
Source: YahooFinanceCA - 🏆 47. / 63 Read more »