A number of catastrophe bonds have been marked down in end of month secondary market pricing sheets, with some of the anticipated names suffering declines of between 25% and 35% in value.
After hurricane Ida’s devastating landfall with 150 mph winds in Louisiana on Sunday it was always anticipated that there would be a mark-to-market reaction in catastrophe bonds.
The majority of insurance-linked securities (ILS) fund managers seem relatively comfortable that cat bond losses will be largely mark-to-market from the hurricane, as long as the industry loss remains in the current estimated range of around $15 billion to as high as $25 billion.
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