Peru cat bond pay out of $60m for earthquake confirmed


Peru’s earthquake catastrophe bond will make a $60 million partial pay out of its principal to the country after its parametric triggering was confirmed in the calculation agent report, it has now been confirmed to us.

This $200 million IBRD CAR 120 Peru quake catastrophe bond, part of the World Bank’s giant Pacific Alliance issuance of earthquake cat bonds for the four nations of the trading bloc, was triggered by the magnitude 8.0 earthquake that struck Peru on Sunday 26th May.

That earthquake, which as we explained at the time it occurred suggested a 30% pay out of the cat bond’s principal looked likely, has now been deemed strong enough to breach the required parameters and as a result investors in the bond will face a loss.

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