Cat bonds return

The market for catastrophe bonds dried up in 2008 and early 2009 as the financial crisis took its toll. Confidence is returning, helped by wide spreads and a re-think about the assets used to collateralise catastrophe bonds, but issuance has yet to return to 2007 levels. By Peter Madigan

Financial markets have been gripped by a storm over the past couple of years, but violent tempests of the physical kind have proven mercifully rare. Since the record-shattering 2005 Atlantic hurricane season, which saw an unprecedented 28 named storms, the US gulf and east coasts have been relatively unscathed, with only hurricanes Gustav and Ike in 2008 causing any significant damage.

The first four months of 2010, however, have seen a succession of natural disasters elsewhere in the world. On