Catastrophe Bond Investors Told to Brace for Jamaica Payout (1)

Investors in a catastrophe bond tied to Jamaica look set to experience a trigger event as Hurricane Melissa barrels toward the Caribbean island as a Category 5 storm.

“Based on current models, there is a high chance that there will be at least a partial payout” of Jamaica’s cat bond, said Florian Steiger, chief executive of Icosa Investments AG, a Swiss investment firm specializing in alternative fixed-income strategies.

If accurate, the projection means Hurricane Melissa is on track to force a scenario that catastrophe bond investors dodged when Hurricane Beryl hit in 2024. Jamaica’s $150 million cat bond, ...