The overall yield of the catastrophe bond market rose as the market repriced positions in the wake of recent hurricane Milton, but like other market indices and the performance of cat bond funds themselves, the effect of the storm has been quickly overtaken by continued positive market momentum.
In recent months the catastrophe bond market yield has been showing typical seasonal traits associated with the peak of the Atlantic hurricane season.
As is typical when seasonality from the wind season affects cat bond market yields, the overall yield had declined through August and September, a trend that typically continues through October although slowing somewhat as peak-season passes.
In October, hurricane Milton made landfall in Florida and, as we’ve documented, moved the prices of some outstanding cat bonds, resulting in the Swiss Re cat bond index falling at first (since having recovered somewhat and risen higher from that decline).
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