• Thu. Mar 30th, 2023

Planet Bank executes its biggest single nation catastrophe bond and swap transaction to deliver Chile $630 million in economic protection against earthquakes – Chile


Mar 17, 2023

Washington D.C., March 17, 2023 – The International Bank for Reconstruction and Improvement (IBRD), these days priced a joint catastrophe bond and swap transaction that supplies a total of $630 million of earthquake insurance coverage coverage to the Government of Chile, which consists of $350 million of catastrophe bonds and $280 million of catastrophe swaps. By simultaneously supplying the threat to each bond investors and to insurance coverage and reinsurance businesses in swap type, the Planet Bank and Chile had been in a position to access a bigger quantity of threat bearing capacity than either marketplace could offer you on its personal.

The transaction supplies Chile with economic protection to mitigate the potentially disruptive financial impacts of earthquakes and resulting tsunamis. It tends to make funds readily obtainable in the case of disaster, protects Chile’s fiscal price range, and reduces the possible want to mobilize debt in an event’s aftermath. It supplies coverage for 3 years with payouts triggered if an earthquake meets the pre-defined parametric criteria for place and severity.

This will be the initial catastrophe bond listed in on the Hong Kong Exchange (HKEX). It is IBRD’s biggest catastrophe threat transfer transaction for a single nation, its nineteenth catastrophe bond and the second for Chile. The initial for Chile was issued in March 2018 as component of a transaction that also incorporated bonds issued by IBRD for the 3 other Pacific Alliance nations Colombia, Mexico, and Peru.

Mario Marcel, Minister of Finance, Republic of Chile,thanked the Planet Bank for the help in this transaction. “This constitutes a new step produced by Chile towards a greater protected and resilient public finances, in the face of massive-scale organic catastrophe events, such as an earthquake, and is component of a complete method that reinforces our commitment to fiscal duty, which has been highlighted by distinctive regional and international agents.”

We are pleased to have partnered with the Government of Chile on this essential transaction. It is a further instance of how the Planet Bank mobilizes private capital for improvement and supports disaster threat management in our member nations,” stated Anshula Kant, Managing Director and Planet Bank Group Chief Monetary Officer. “We are encouraged by the incredibly robust demand for the transaction from each bond investors and insurance coverage counterparts who have shown their help for a a lot more resilient future for the men and women of Chile.”

“Chile is a single of the most seismically active nations in the globe, experiencing some of the biggest earthquakes ever recorded,” stated Carlos Felipe Jaramillo, Planet Bank Vice President for Latin America and the Caribbean. “Through the intermediation of the Planet Bank, this CAT bond permits Chile to transfer big earthquake dangers to the capital markets even though enabling the authorities to respond promptly to the wants of citizens when calamities strike.”

Aon Securities, GC Securities, a division of MMC Securities LLC, and Swiss Re Capital Markets had been Joint Structuring Agent, Joint Manager and Joint Bookrunner. Mercer Investments (HK) Restricted (“MIHK”) was the Joint Manager. AIR Worldwide offered the threat modeling and evaluation for the transaction.

“Aon Securities is pleased to companion with the Planet Bank to assist the Republic of Chile return to the marketplace for a further prosperous transaction. We are proud to be an integral component of Chile’s broader program to handle the economic dangers of organic disasters, and we appear forward to assisting with the subsequent phase of this journey,” stated Paul Schultz, Chairman and CEO Aon Securities.

“We are extremely pleased to have worked with the Government of Chile and the Planet Bank on this essential transaction which closes the protection gap and additional builds momentum in transfer of worldwide public catastrophic threat to the capital and reinsurance markets,” stated Cory Anger, Managing Director of GC Securities.

Catastrophe Bonds Investor Distribution

By Investor Form

By Geography

Asset Managers/Insurance coverage/Pension Funds




ILS Fund


North America






Pension Fund




Catastrophe Swap Counterpart Distribution

Europe – 60%

North America – 36%

Bermuda – four%

Summary Bond Terms and Circumstances

Form of Note

Automobile 131


Planet Bank (International Bank for Reconstruction and Improvement, IBRD)

Size (Aggregate Nominal Quantity) *

US $350 million catastrophe bond

Covered Perils


Trigger Form

Parametric, Per Occurrence

Trade Date

March 17, 2023

Settlement Date

March 24, 2023

Scheduled Maturity Date

March 31, 2026

Problem Value

one hundred%

Coupon (per annum)

Compounded SOFR + Funding Margin + Threat Margin

Coupon Payment Dates


Funding Margin

+.04% per annum

Threat Margin (Threat Period)

+four.75% per annum

Redemption Quantity

The Outstanding Nominal Quantity lowered by any Principal Reductions and/or Partial Repayments


This press release is not an offer you for sale of securities of the International Bank for Reconstruction and Improvement (“IBRD”), also identified in the capital markets as “Planet Bank”. Any supplying of Planet Bank bonds described herein will take location solely on the basis of the relevant supplying documentation such as, but not restricted to, the Prospectus, the Prospectus Supplement, the Final Terms and any connected legal documentation. Investing in the bonds described herein is speculative and entails a higher degree of threat such as the threat of a total loss of principal quantity. The bonds will be presented and sold, and could be reoffered and sold, only to investors who (i) are “qualified institutional buyers” inside the which means of Rule 144A beneath the United States Securities Act of 1933, as amended, and (ii) are residents of and getting in, and will hold the bonds in, a permitted U.S. jurisdiction or a permitted non-U.S. jurisdiction (and meet the other specifications set forth beneath “Notice to Investors” in the Prospectus Supplement). The bonds will not transferable except in accordance with the restrictions described beneath “Notice to Investors” in the Prospectus Supplement.

Net proceeds of the bonds described herein are not committed or earmarked for lending to, or financing of, any unique projects or applications. Payments on the bonds described herein are not funded by any unique project or system.

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Investor Relations and Sustainable Finance | Planet Bank Treasury |

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