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Super typhoon Rai puts Philippines World Bank cat bond on alert

Super typhoon Rai, or typhoon 28W which is known locally in the Philippines as Odette, is tracking towards the country’s central and southern islands and is expected to make landfall with sustained winds as high as 160 mph, putting holders of the World Bank issued IBRD CAR 123-124 catastrophe bond on alert.

The World Bank International Bank for Reconstruction and Development (IBRD) issued Capital-At-Risk Notes Series 123 and 124 came to market in late 2019 and provides the Republic of the Philippines with insurance protection against impacts of earthquakes and tropical cyclones.

The protection is delivered using a modelled loss trigger, which as a result makes it impossible to predict whether a strong cyclone like Super typhoon Rai could result in a significant threat to the investors holding the notes.


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