Credit derivatives Cat bonds & Cat Swaps

Today the whole financial world is eyeing Spain in fact everyone is Freaking Out Over Spain‘sBond Auction will happen today. The Spanish benchmark bond are into red territory with the yield spiking from an intraday low of 5.717% early to 5.89%, finally catching up with Spanish CDS which have been wider for a while, now that CDS is once again more liquid and credible than cash bonds.

So just thought of sharing few exotic bonds :-

Catastrophe bonds, also known as cat bonds, are a form of securitization used to transfer natural catastrophe risk to the capital market. Continue reading “Credit derivatives Cat bonds & Cat Swaps”