World Bank Capital-at-Risk Notes Program news

While the World Bank has been a key driving force in the catastrophe bond market for many years, of late its senior leadership has been relatively quiet about the use of cat bonds as a key disaster risk financing and risk transfer option for its sovereign client-base.

The notes associated with the remaining $97.5 million of principal from the Philippines governments World Bank issued IBRD CAR 123-124 catastrophe bond that is exposed to tropical cyclones have now been marked down implying a total loss is expected by the market after super typhoon Noru, Artemis has learned.

Given the significant impacts of recent super typhoon Noru, locally known as Karding, which made landfall in Luzon on September 25th, we’ve learned that the Bureau of the Treasury of the Republic of the Philippines has now issued a notice to request its World Bank issued IBRD CAR 123-124 catastrophe bond undergo another event calculation […]

Twelve Capital, the insurance-linked securities (ILS) and reinsurance linked fund manager, agrees with other opinions that recent super typhoon Noru may cause a default of the Philippine government’s World Bank facilitated IBRD CAR 123-124 catastrophe bond.

The Philippines World Bank facilitated catastrophe bond is deemed “likely to default” after the landfall and impacts of super typhoon Noru, according to investment fund manager Plenum Investments.

In the space of just 24 hours, typhoon Noru has explosively intensified into super typhoon Noru as it approaches the Philippines and now packing sustained winds of more than 150 mph the storm is a potential threat to the countries World Bank facilitated catastrophe bond.

The calculation agent for the Philippines government’s World Bank issued IBRD CAR 123-124 catastrophe bond has now completed its full analysis on the impacts of tropical storm Megi (locally known as storm Agaton), finding that neither the wind nor rain parameters have triggered any payout from the bond.

The calculation agent has now found that holders of the Philippines governments World Bank issued IBRD CAR 123-124 catastrophe bond do not face any loss of principal following the wind-related impacts of tropical storm Megi (locally known as storm Agaton), Artemis has learned.

Having already been triggered and paid out US $52.5 million, we’ve now learned the Philippines governments World Bank issued IBRD CAR 123-124 catastrophe bond will not face any additional loss of principal because of the rainfall from super typhoon Rai (locally known as Odette).

When a renewal comes up for consideration for the first catastrophe bond transaction to be sponsored by Jamaica, there is already some discussion regarding the need for a larger cover to be in place, or for it to be expanded to cover additional Caribbean island nations, a World Bank Managing Director has said.