Jamaica secures US$200 million World Bank catastrophe bond

The landmark deal, finalized yesterday, more than replaces the previous US$150 million bond, which was fully drawn down last year following the devastating impact of Hurricane Melissa in October 2025.

Issued through the International Bank for Reconstruction and Development (IBRD), rated Aaa/AAA, the new catastrophe (cat) bond drew exceptional interest from global markets. Twenty-five international investors participated — a sharp increase from the 15 who backed Jamaica’s 2024 issuance — underscoring strong confidence in the instrument and the island’s disaster risk management framework.

The bond is structured under the IBRD’s “capital at risk” notes programme, a mechanism that allows developing nations to transfer disaster-related risks to private capital markets. Under the arrangement, the World Bank issues the bond while entering into a risk transfer agreement with Jamaica. Payouts are triggered automatically if a named storm meets predetermined criteria for location and severity.

For Jamaica — regularly exposed to Atlantic hurricane seasons — the coverage forms a critical pillar of a multi-layered disaster risk financing strategy. The goal is not only to ensure rapid response funding after a major storm but also to shield the national budget from crippling post-disaster expenses.

Finance and the Public Service Minister, Fayval Williams, welcomed the successful placement and acknowledged the international partners who made it possible.

“Jamaica is incredibly grateful to the World Bank for its market guidance and placement of the catastrophe bond across a wide cross-section of global investors,” Minister Williams said. “Additionally, Jamaica says ‘Thank you’ to the Monetary Authority of Singapore, who will be supporting the transaction financially.”

The cat bond is scheduled to mature on May 23, 2030.

The deal strengthens the island’s financial resilience ahead of the peak hurricane season, ensuring that if the worst should occur, recovery dollars will be ready before the waters recede.