The Government of Jamaica has returned to the catastrophe bond market for the third time, issued by the World Bank’s International Bank for Reconstruction and Development (IBRD), renewing a key part of its disaster risk financing infrastructure, following the triggering and full disbursement of a second catastrophe bond in 2025 following Hurricane Melissa.
The World Bank said the deal was oversubscribed by investors, supporting an increase in its initial target amount, which our sister publication Artemis reported back in April.
The deal was reportedly issued under the International Bank for Reconstruction and Development’s “Risk Capital” notes program, which enables member countries to transfer disaster-related risks to global capital markets. Under the deal structure, the World Bank issues bonds and enters into a risk transfer agreement with the Government of Jamaica, which will pay an underwriting premium based on terms agreed in the capital markets.
The World Bank explains that Jamaica is highly vulnerable to the financial consequences of hurricanes, which could have significant impacts on lives, livelihoods and economic stability.
“Cat bonds provide pre-arranged financing for protection from low-frequency, high-impact hurricane events, complementing other instruments such as budget reserves, contingency financing and insurance,” the World Bank added.
Aon Securities and Swiss Re Capital Markets are joint structuring agents and joint bookrunners on the transaction. Moody’s RMS is a risk modeler and calculation agent.
For more details on the parametric triggering design of the World Bank-assisted IBRD CAR Jamaica 2026 catastrophe bond issuance, readers can consult the Artemis Transaction Directory, which tracks more than 1,000 catastrophe bond and other insurance-linked securities (ILS) transactions issued since the market’s inception in the mid-1990s.
The Honorable Favarr Williams, Minister of Finance and Public Services, Government of Jamaica, commented: “Having disaster risk financing in place is a key pillar of our resilience-building framework. We are grateful to our partner the World Bank for their continued support. Cat bonds are an important component in ensuring access to Jamaica’s capital markets.”
Jorge Familiar, Vice President and Treasurer of the World Bank Group, said: “We are proud to continue supporting Jamaica’s access to capital markets through the World Bank to strengthen its resilience to hurricane risk.
“Expenditures following Hurricane Melissa have once again shown how countries can prepare for disasters with carefully crafted parametric tools that provide fast, reliable financial protection when they are needed most.”
“Jamaica’s commitment to building resilience and protecting livelihoods through hurricane insurance is commendable,” said Susana Cordeiro Guerra, World Bank Vice President for Latin America and the Caribbean. “Having experienced two severe hurricanes in the past two years, financial preparedness remains critical, and the World Bank will continue to support Jamaica in planning and moving forward.”
“Moody’s is proud to partner with the World Bank on this latest bond issuance, which plays an important role in strengthening the Government of Jamaica’s mission to build financial resilience to natural disasters,” said Michael Steel, managing director of Moody’s Insurance Solutions.
“Cat bonds are becoming increasingly important in providing timely access to funding following severe events, and it is important that they are backed by strong risk quantification.”
