Mexico’s cat bond coverage continues, despite shuttering of FONDEN

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Mexico’s still in-force $485 million IBRD / FONDEN 2020  catastrophe bond will continue to provide the country with important disaster insurance protection, as the beneficiary of the cover has been shifted away from the shuttered FONDEN disaster fund to the country’s Treasury.

We’re told that a notification has been sent to investors in and holders of the World Bank issued Mexican catastrophe bond, to explain that the coverage it provides will continue uninterrupted, despite Mexico’s Fund for Natural Disasters (El Fondo de Desastres Naturales), more commonly known as FONDEN, having been dismantled.

As we reported last October, FONDEN was set to be dismantled after Mexico’s lawmakers in the senate voted to reform that area of public funding.

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