Catastrophe bond: Difference between revisions

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Also known as a Cat bond.
Also known as a Cat bond.


== See also ==
== See also ==
* [[Bond]]
* [[Bond]]
* [[ILS]]
* [[ILS]]
* [[Climate change: testing the resilience of corporates’ creditworthiness to natural catastrophes]]


[[Category:Debt_Capital_Markets]]
[[Category:Long_term_funding]]
[[Category:Business_and_Operational_Risk]]
[[Category:Manage_risks]]
[[Category:Managing_Risk]]
[[Category:Risk_frameworks]]

Latest revision as of 12:48, 12 November 2015

A high-yield bond whose full payout is dependent on a given natural disaster not happening.

This has the effect of providing insurance-like financial protection to the bond issuer. If the particular catastrophe happens, the issuer pays less - or in the extreme case nothing at all - on the bond.

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

Also known as a Cat bond.


See also