Mexico Becomes the First Country to Issue a Catastrophe Bond Using the New World Bank Platform

Mexico Becomes the First Country to Issue a Catastrophe Bond Using the New World Bank Platform

Mexico recently issued a US $290 million series of notes to provide cover for earthquake and hurricane damage under the World Bank’s new MultiCat Program, becoming the first country to use the new platform. The platform is designed to increase developing countries’ ability, either individually or cooperatively, to access capital markets to protect against various risks, including floods, earthquakes, hurricanes and other wind storms. Among other things, the program offers the advantage of a common documentation, legal and operational framework for governments in developing countries that are often ill-equipped to negotiate the bond market alone.
 
It should come as little surprise that Mexico is at the forefront of taking advantage of the new platform. Mexico has suffered a number of severe natural disasters in recent years, has significant long-term risk from such perils and was the first Latin American country to float a catastrophe bond, a US $160 million bond issued in 1996.
 
If you would be interested in learning more about the World Bank’s new MultiCat Program, or other Latin American (re)insurance markets and/or regulatory environments, please contact Machua Millett by email at mmillett@eapdlaw.com.
 
© Copyright 2009 by Edwards Angell Palmer and Dodge LLP. All rights reserved. Reprinted with permission. This blog originally appeared on the InsureReinsure Blog. The InsureReinsure Blog is one of the Insurance Law Center’s Top 50 Insurance Blogs for 2009. The Top 50 Insurance Blogs may be found here.