Catastrophe bond and Category 3 messages: Difference between pages

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imported>Doug Williamson
(Added link to Treasurer's Handbook)
 
imported>Doug Williamson
(Create the page. Sources: The Treasurer, March 2017, p13; SWIFT guide https://www.swift.com/node/21316)
 
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A high-yield bond whose full payout is dependent on a given natural disaster <u>not</u> happening.
''Society for Worldwide Interbank Financial Telecommunications (SWIFT)''


This has the effect of providing insurance-like financial protection to the bond <u>issuer</u>. 
SWIFT Category 3 messages relate to treasury markets and include:
If the particular catastrophe happens, the issuer pays less - or in the extreme case nothing at all - on the bond.
*Foreign exchange;
*Money markets; and
*Derivatives.


The investor enjoys a higher yield, in exchange for accepting the catastrophe risk effectively transferred from the issuer.


Also known as a Cat bond.
<span style="color:#4B0082">'''''Changes to SWIFT messages in 2017'''''</span>
 
:"Members using SWIFT Category 3 messages to report and confirm forex transactions and OTC derivatives are recommended to seek further information from SWIFT or their electronic trading platform suppliers, to ensure they are able to format messages by the November [2017 changes] implementation date."
 
:''The Treasurer magazine, March 2017, p13 - Technical briefing.''




== See also ==
== See also ==
* [[Bond]]
* [[Derivative instrument]]
* [[ILS]]
* [[Forex]]
* [[Climate change: testing the resilience of corporates’ creditworthiness to natural catastrophes]]
* [[MT940]]
 
* [[OTC]]
[[Category:Long_term_funding]]
* [[Society for Worldwide Interbank Financial Telecommunications]]
[[Category:Manage_risks]]
* [[SWIFT]]
[[Category:Risk_frameworks]]
* [[SWIFTNet]]

Revision as of 11:41, 13 March 2017

Society for Worldwide Interbank Financial Telecommunications (SWIFT)

SWIFT Category 3 messages relate to treasury markets and include:

  • Foreign exchange;
  • Money markets; and
  • Derivatives.


Changes to SWIFT messages in 2017

"Members using SWIFT Category 3 messages to report and confirm forex transactions and OTC derivatives are recommended to seek further information from SWIFT or their electronic trading platform suppliers, to ensure they are able to format messages by the November [2017 changes] implementation date."
The Treasurer magazine, March 2017, p13 - Technical briefing.


See also