S&P Report Analyzes 10 Years Of Natural Catastrophe Bonds

September 12, 2008

A report from Standard & Poor’s Ratings Services notes that the “natural catastrophe (nat-cat) bond market has come a long way since S&P rated its first true nat-cat bond a decade ago.”

“As the market has become more sophisticated and the structures become more complex, our ratings criteria have evolved,” explained credit analyst Cameron Heath in the article titled “Methodology And Assumptions Used For Rating Natural Catastrophe Insurance-Linked Securities.”

S&P stated: “The insurance-linked securities market now covers a variety of natural perils and geographic areas. Transactions have evolved beyond what was once considered the traditional single-event, single-peril nat-cat bond to include multi-peril and event structures, sidecars, loans, and even synthetic collateralized debt obligations.

“The above-mentioned article discusses the key risk factors associated with these structures and kicks off a series of articles that between them will discuss Standard & Poor’s response to these developments.”

The report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor’s credit ratings, research, and risk analysis, at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to research_request@standardandpoors.com.

Ratings information can also be found on S&P’s public Web site at www.standardandpoors.com.

Source: Standard & Poor’s

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