Mexico Sovereign Catastrophe Bonds
- Context
- Mexico needed liquidity within weeks of a major earthquake or hurricane, without waiting for budget reallocation or emergency borrowing.
- Instrument
- Parametric catastrophe bond triggered by earthquake magnitude and hurricane pressure thresholds. The 2006 transaction seeded the World Bank’s MultiCat Program; the 2009 issuance was the first placed under it.
- Role
- Led the technical design from the Government of Mexico in 2006; joined the World Bank team for the 2009 issuance under the MultiCat Program.
- Outcome
- First sovereign cat bond issued by a developing economy. Template reused by subsequent sovereign issuers in Latin America and the Pacific.
