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Tight cat bond capacity drove simultaneous issuance of Chile cat swaps: World Bank

The fact capacity and capital was tight in the catastrophe bond market at the time of the issuance of the $350 million of IBRD – Chile 2023 cat bond notes drove the World Bank team to look to traditional re/insurers and the issuance of simultaneous catastrophe swaps, resulting in much stronger execution for Chile.

Back in March catastrophe bond market conditions were a far cry from the relatively abundant capacity we see today, that has been triggered by a faster flow of maturities and so recycling of capital, as well as investors inflows to cat bond funds.

The World Bank came to market with a parametric earthquake catastrophe bond for the government of the Republic of Chile in March, but found a simultaneous tapping of capital markets alongside traditional insurance and reinsurance capital the optimal issuance solution.


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