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Government of Jamaica

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Government of Jamaica

World Bank Settles Catastrophe Bond issued on behalf of the Government of Jamaica

Hon. Nigel Clarke, DPhil., MP
Hon. Nigel Clarke, DPhil., MP

Ministry of Finance and the Public Service

Audit Committee Performance Evaluation guideline (ACPE tool)

­­­­­­­­­­­Kingston, Jamaica: Friday, May 3, 2024

On Thursday, May 2, 2024, the World Bank (International Bank for Reconstruction and Development, or IBRD, AAA/Aaa) settled a catastrophe bond issued on behalf of Jamaica (GOJ) in the amount of US$150 million.

The cat bond attracted fifteen (15) global investors, providing funding for catastrophe insurance to Jamaica for four hurricane seasons. Under IBRD’s “capital at risk” notes program, catastrophe bonds issued can be used to transfer risks related to natural disasters and other risks from developing countries to the capital markets. In the event of a named storm, insurance payouts to Jamaica will be triggered once the storm meets the criteria for location and severity set forth in the bond terms. The bond forms part of the GOJ’s multi-layered disaster risk financing strategy, allowing the Government to respond swiftly in reducing the fiscal burden of natural disasters.

Commenting on the bond issuance, the Minister of Finance and the Public Service, Dr. the Hon.Nigel Clarke, stated that “Jamaica is pleased to have sponsored the second catastrophe bond in the international capital markets protecting Jamaica against natural disasters with the much appreciated support and assistance of the World Bank. Consistent with our National Natural Disaster Risk Financing policy, we seek to ensure the availability of fiscal resources to enable an immediate response to emergency expenditures that could arise from a direct hit by a high intensity hurricane. This catastrophe bond covers hurricane seasons 2024, 2025, 2026 and 2027 and complements other disaster risk financing instruments that we have in place. We express our gratitude for the Hong Kong Insurance Authority who supported the transaction financially.” 

The cat bond is a renewal of the catastrophe bond issued in 2021 and is scheduled to mature on December 29, 2027. The summary of the bond terms are as follows:

..2/Jamaica Cat Bond

Type of Note

CAR 136

Issuer

World Bank (International Bank for Reconstruction and Development, IBRD)

Size (Aggregate Nominal Amount)

US $150 million

Covered Perils

Named Storm

Trigger Type

Parametric, Per Occurrence

Trade Date

April 25, 2024

Settlement Date

May 2, 2024

Scheduled Maturity Date

December 29, 2027

Issue Price

100%

Bond Coupon (per annum)

Compounded SOFR + Funding Margin + Risk Margin

Funding Margin

0.19% per annum

Risk Margin

7.00% per annum

Coupon Payment Dates

Monthly

Redemption Amount

The Outstanding Nominal Amount reduced by any Principal Reductions and/or Partial Repayments

 

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For further information contact: 

Ministry of Finance and the Public Service

30 National Heroes Circle

Kingston 4

The Hon. Nigel Clarke, D.Phil., MP

Minister of Finance and the Public Service
30 National Heroes Circle, Kingston 4
Tel: (876) 932-4656 / 4660 / 4655
Eml: opedjamaica@gmail.com

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