Durrant Pate/Contributor

The Government of Jamaica has raised the target size for its third catastrophe bond, now aiming to secure US$200 million of parametric named storm and hurricane insurance protection from the World Bank-facilitated IBRD CAR Jamaica 2026 issuance.

It comes prior to the 2026 Atlantic hurricane season, which officially begins on June 1, 2026, and ends on November 30, 2026. This latest cat-bond replaces the previous US$150 million bond that triggered after Hurricane Melissa in 2025. 

Last month, Jamaica returned for its third cat-bond sponsorship, upsizing the amount to US$200 million this time around. Jamaica’s second catastrophe bond had been exhausted after paying out in full due to the devastating impacts of Hurricane Melissa in October 2025, which triggered the notes, with the Government of Jamaica benefiting from the US$150 million payout within weeks to aid in the country’s recovery.

Price guidance for the risk margin

Information gleaned by Our Today suggests the price guidance for the risk margin (or spread) these new Jamaica cat bond notes will pay investors has narrowed towards the middle of the initial range that was offered. Jamaica first secured parametric hurricane insurance disaster risk protection from the capital markets through the US$185 million IBRD CAR 130 cat bond in 2021.

The government followed up with a US$150 million renewal through the IBRD CAR Jamaica 2024 issuance in May 2024, which was the cat bond that paid out in full after Melissa struck the island last year. As with Jamaica’s previous cat-bonds, the new 2026 notes are set to be issued by the World Bank under its global debt issuance facility and the Capital-At-Risk notes program.

The IBRD Jamaica 2026 cat bond notes are now targeted to provide the Government of Jamaica with a US$200 million capital markets-supported source of parametric per-occurrence named storm and hurricane protection that will run across a term covering four hurricane seasons, with maturity expected in May 2030.

The new US$200 million 2026 cat-bond notes that the IBRD is offering come with an initial expected loss of 2.48%. The notes were first offered to investors with a risk margin guidance in a range from 6.5% to 7.25%, which has now been narrowed to an updated range of 6.75% to 7%.

With the target size for this third catastrophe bond for the country increasing, analysts say it is encouraging to see Jamaica looking to secure more protection this time around to cover more of the potential economic impact of major hurricane disasters that could affect the island nation over the coming years.