Catastrophe bond returns heading back towards last Augusts peak

by Artemis on May 1, 2009

Now that the catastrophe bond market is looking more healthy and issuance has returned to normal levels it’s a good time to take another look at the Swiss Re Cat Bond Total Return Index to see how that indicator of market health is responding. The index tracks the total rate of return for all dollar-denominated bonds so is a good indicator of investor appetite and market health.

Swiss Re Cat Bond Total Return Index

As you can see the index is continuing it’s recovery and is now heading back towards it’s all time highs of last August (before the market ground to a halt). Given the pipeline of deals waiting to come to market we can expect this rise to continue for the next few months. You can chart the index on Bloomberg here and we will continue to provide monthly updates.

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Boslino May 1, 2009 at 9:43 am

It doesn’t take a genius to work out that the return for the market is on a steady increase given the ridiculously high spreads for the 2009 issuances to date.

The market is far from healthy, issuers hands are tied with respect to spreads and they are over-paying for the cover provided by the capital markets.

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