The cat bond, which will benefit the Mexican government’s Fund for Natural Disasters, is the first listed property and casualty bond issued under the World Bank’s Capital-at-Risk notes programme.
The notes provide three years of earthquake protection and three seasons of Atlantic and Pacific named storm cover.
Through the World Bank Capital-at-Risk notes programme, Mexico is returning to the cat bond market for the first time since 2012, when it accessed capital markets-based protection via the MultiCat Mexico catastrophe bonds.
Aidan Pope, CEO of Latin America and the Caribbean at Guy Carpenter, commented: “The World Bank Capital-at-Risk notes protecting the government of Mexico’s Fund for Natural Disasters provide a very cost-efficient source of risk transfer and maximizes protection in one of the regions with the greatest exposure.”
Pope added: “With this issuance, the government of Mexico has increased its resiliency in line with their overall macroprudential risk management strategy.”
GC Securities served as the joint structuring agent and joint manager along with Munich Re, as well as the sole book-runner and initial purchaser.
In total, GC Securities has placed six insurance-linked securities (ILS) for the World Bank’s Capital-at-Risk notes programme.