Sidley advised the International Bank for Reconstruction and Development (IBRD or World Bank), in a joint catastrophe bond and swap transaction that provides a total of US$630 million of earthquake insurance coverage to the Government of Chile, which consists of US$350 million of catastrophe bonds and US$280 million of catastrophe swaps.
This will be the first catastrophe bond listed on the Hong Kong Stock Exchange (HKEX). It is IBRD’s largest catastrophe risk transfer transaction for a single country to date, its 19th catastrophe bond, and the second for Chile.
The transaction provides Chile with financial protection to mitigate the potentially disruptive economic impacts of earthquakes and resulting tsunamis. It provides coverage for three years with payouts triggered if an earthquake meets the pre-defined parametric criteria for location and severity.
The Sidley team is led by partners Joseph R. Gottlieb; Sherlyn Lau, a member of Sidley’s Executive Committee and deputy head of China Corporate & Finance group; and Dominic James. Other team members included senior associate Janice Lam and associate Geoffrey Chan.