{"id":912,"date":"2025-10-27T09:20:21","date_gmt":"2025-10-27T10:20:21","guid":{"rendered":"http:\/\/fictionuncovered.com\/?p=912"},"modified":"2025-10-30T15:39:41","modified_gmt":"2025-10-30T15:39:41","slug":"jamaica-cat-bond-marked-down-hurricane-melissa-forecast-for-intense-major-landfall","status":"publish","type":"post","link":"http:\/\/fictionuncovered.com\/index.php\/2025\/10\/27\/jamaica-cat-bond-marked-down-hurricane-melissa-forecast-for-intense-major-landfall\/","title":{"rendered":"Jamaica cat bond marked down. Hurricane Melissa forecast for intense major landfall"},"content":{"rendered":"

This content is copyright to www.artemis.bm<\/a> and should not appear anywhere else, or an infringement has occurred.<\/p>\n

Jamaica\u2019s $150 million IBRD CAR Jamaica 2024<\/a> parametric World Bank catastrophe bond has been marked down on secondary pricing sheets and the US National Hurricane Center forecast cone still shows a major hurricane Melissa landfall.
\n<\/span>
\n\"hurricane-melissa-map-jamaica-catastrophe-bond\"<\/a>This article was originally published on October 25th. Melissa became a hurricane on Saturday evening UK time and rapidly intensified into a major hurricane on Sunday.<\/p>\n

Our latest update can be found in a new article from Oct 28th here<\/strong><\/a>.<\/p>\n

Original article begins:<\/em> The forecast as of Saturday morning October 25th, sees the NHC\u2019s forecast cone centred on the island nation of Jamaica, with the current forecast indicating a potentially devastating landfall scenario for what is still an intensifying tropical storm Melissa at this time. Melissa is expected to reach hurricane status soon and then intensify rapidly.<\/p>\n

It\u2019s important to note that there remains considerable uncertainty and the forecast could change, sparing Jamaica from a major hurricane direct landfall.<\/p>\n

The NHC forecast cone currently points to landfall as occurring on Tuesday 28th, with a slow moving Melissa forecast to enter a phase of rapid intensification as it moves slowly towards Jamaica.<\/p>\n

The forecast at this time shows hurricane Melissa intensifying rapidly to become a major storm, with wind speeds potentially reaching 155 mph prior to landfall in Jamaica and 145 mph when it gets to the coast, a scenario no one wants to see for the people in its path.<\/p>\n

You can see Tomer Burg\u2019s graphic of the NHC forecast cone with the forecast advisory wind speeds below (this image will update over time<\/strong>):<\/p>\n

\"Tropical<\/a><\/p>\n

It means there are a number of days left for the steering currents to hopefully shift Melissa away from this major hurricane landfall outcome. For the people of Jamaica we certainly hope that the forecasts become more favourable over time.<\/p>\n

But numerous forecast models continue to show a landfall event in Jamaica at major Category 4 or 5 strength, which could be particularly impactful for the country and a severe danger to lives, livelihoods and property there.<\/p>\n

The forecasts currently show a scenario that would put Jamaica\u2019s IBRD CAR Jamaica 2024<\/a> parametric World Bank catastrophe bond at meaningful risk of being triggered, with a number of models showing a deep enough pressure to potentially activate the cat bond\u2019s payout mechanism.<\/p>\n

The NHC\u2019s forecast as of Saturday morning suggests a major hurricane Melissa landfall with sustained winds of as high as 155 mph, a scenario that would suggest Melissa\u2019s minimum central pressure could fall to levels low enough to trigger the World Bank facilitated catastrophe bond, should it pass through one of the parametric boxes at a pressure low enough to activate a payout.<\/p>\n

As we\u2019ve explained previously, it is central pressure and location of a hurricane that matters for the cat bond, with Jamaica and the surrounding sea broken into parametric boxes for the IBRD cat bond\u2019s trigger (more details on that can be seen in one of our articles related to 2024\u2019s hurricane Beryl<\/a>).<\/p>\n

We understand that the lowest payout threshold possible is for a 30% triggering of the cat bond note principal, while a more intense storm can cause a full payout just for entering a single box. Parametric boxes can also be additive, in that if a storm passes through more than one the payout for each can get added together, under certain circumstances.<\/p>\n

Given the number of days left before the currently forecast landfall, there remains a good deal of uncertainty and the path Melissa takes as it intensifies and meanders through the Caribbean could be critical in whether or where a direct landfall takes place.<\/p>\n

But whether it directly passes over Jamaica or not, hurricane Melissa looks set to bring significant impacts to Jamaica, with some days of tropical storm and hurricane wind speeds and well over 20 inches of rainfall deemed likely now, a dangerous scenario even if landfall does not occur.<\/p>\n

Given the evident risk to the Jamaica catastrophe bond, we\u2019re told the notes have been marked down in a number of the cat bond market\u2019s secondary pricing sheets, with bids now ranging from as low as 60 cents on the dollar, indicating market uncertainty as a hurricane approaches. However, given the evident threat of a triggering event, if the current forecast scenario plays out, it seems unlikely any live cat trading would be seen unless at more distressed pricing levels.<\/p>\n

You can read what a number of cat bond fund managers said about Melissa and the Jamaica cat bond in our article from Thursday morning that we updated on Friday here<\/a>.<\/p>\n

If the current NHC forecast were to play out we assume Jamaica\u2019s parametric disaster insurance arrangements would also face a high risk of being triggered and these are structured in such a way as to activate and payout before the cat bond, with the cat bond sitting at the highest, more remote layers in the country\u2019s sophisticated disaster risk financing tower.<\/p>\n

What will become major hurricane Melissa also poses a significant threat to eastern Cuba as well, where a landfall is also currently forecast at major wind speeds.<\/p>\n

For the people of Jamaica and Cuba we hope the forecast shifts with time over the next few days, to minimise the chances of what could be a particularly devastating and dangerous scenario for these regions.<\/p>\n

A faster forward pace could reduce the time available to intensify, or a more westward track as some models were still showing yesterday could take Melissa around Jamaica. But even the GFS model, which has been an outlier in taking hurricane Melissa north earlier and to the east of Jamaica, is now moving closer to the country with each model run.<\/p>\n

We will likely update this article over the weekend as the situation develops.
\n<\/a><\/p>\n

\n

Update \u2013 Sat 25th October, 19:00 BST:<\/strong> Melissa has now become a hurricane with 75 mph sustained winds.The forecast cone has not changed significantly, with a major hurricane landfall still indicated for Jamaica.<\/p>\n

The NHC stated, \u201cMaximum sustained winds have increased to near 75 mph (120 km\/h) with higher gusts. Rapid intensification is forecast to occur over the next couple of days and Melissa is forecast to become a major hurricane by Sunday.\u201d<\/p>\n

The NHC also said, \u201cA turn to the north and northeast is forecast on Monday and Tuesday. On the forecast track, the center of Melissa is expected to move near or over Jamaica during the weekend and early next week, and it could be near or over eastern Cuba by the middle of next week.\u201d<\/p>\n

Update \u2013 Sun 26th October, 07:00 GMT:<\/strong> Melissa has intensified rapidly into a major hurricane with sustained winds put at 120 mph in the last NHC update, but meteorologists say that the satellite presentation already suggests higher winds at this time. The forecast remains for hurricane Melissa to continue intensifying into a Category 4 or 5 storm, then track towards a landfall on Jamaica early in the new week.<\/p>\n

The dangerous situation for Jamaica has not lessened at this time, with significant impacts from major hurricane Melissa anticipated.<\/p>\n

The outlook for the Jamaica catastrophe bond remains uncertain, with scenarios showing pressure levels that could trigger the notes still. However, it will come down to landfall pressure as hurricane Melissa moves into the cat bond\u2019s parametric box structure, to define whether a triggering event occurs and a partial, or full, payout comes due.<\/p>\n

Update \u2013 Sun 26th October, 11:00 GMT:<\/strong> Hurricane Melissa has continued to intensify and now has 140 mph sustained winds, making it a highly dangerous Category 4 storm.<\/p>\n

Minimum central pressure has now dropped to 944mb, putting it well into the low-ranges that could potentially activate the parametric trigger of the catastrophe bond Jamaica benefits from, should the storm move closer to the island at this level of intensity or higher.<\/p>\n

The latest NHC forecast states that continued rapid intensification is expected through tonight with Melissa expected to become a Category 5 hurricane, followed by fluctuations in intensity. The current NHC forecast advisory suggests a potential peak in sustained winds at around 160 mph as hurricane Melissa approaches Jamaica, but a slight weakening to winds of around 135-140 mph prior to landfall and then to 120 mph winds once the eye moves ashore.<\/p>\n

This scenario will certainly pose a threat of triggering to Jamaica\u2019s cat bond protection, which could provide valuable disaster insurance financing to aid in recovery if it is activated. With the cat bond sitting at the top of a tower of layered disaster financing and parametric insurance arrangements, those layers beneath the cat bond would likely activate or be triggered first, such as parametric CCRIF insurance coverage.<\/p>\n

As we understand it, the parametric trigger for the cat bond requires the \u201cb-deck\u201d track data from the Automated Tropical Cyclone Forecast (ATCF) System to be used for the calculation agent process. That data can become available relatively quickly after a storm in some cases, but that is the input required to truly understand whether a trigger event has occurred. However, the NHC\u2019s landfall pressure report at the time hurricane Melissa reaches Jamaica should give a reasonable indication whether some kind of payout is likely, or not.<\/p>\n

Landfall is expected either late Monday night or early Tuesday morning local time, at this stage, so there is still some time to go for the picture to become clearer, or for Melissa to encounter some less favourable conditions that could lessen the expected impact. At this time the forecasts continue to indicate a particularly devastating storm for Jamaica is the most likely outcome.
\n<\/a>
\nUpdate \u2013 Mon 27th October, 06:00 GMT:<\/strong> The forecast for Hurricane Melissa has not changed a great deal over night, with Jamaica still facing what could be some of the most devastating impacts from a tropical cyclone in history.<\/p>\n

Hurricane Melissa has intensified further to near 150 mph sustained winds, with higher gusts estimated at around 175 mph.<\/p>\n

The NHC warns that some additional strengthening is expected through today and even with fluctuations in intensity as hurricane Melissa nears landfall in Jamaica early Tuesday, it is expected to still be a powerful major hurricane.<\/p>\n

Jamaica is forecast to face an additional 15 to 30 inches of rainfall as hurricane Melissa passes, with landslides and severe floods a real threat. In addition, between 9 and 13 feet of storm surge is anticipated near and to the east of Melissa\u2019s landfall.<\/p>\n

This remains a very dangerous situation for Jamaica. The threat to lives, livelihoods, property and infrastructure is severe.<\/p>\n

At this stage, there remains a reasonable chance that Jamaica\u2019s World Bank catastrophe bond is triggered. Details at the time hurricane Melissa passes into the parametric boxes matter, of course, but with the storms central pressure currently estimated at 926mb and that likely to drop a little further with any additional intensification, it is well into the territory where a payout may be required.<\/p>\n

It\u2019s worth noting that, it appears the current forecast path for Melissa would take it first into outer parametric boxes 16 or 17, after which 11 or 12 seem most likely at this time. From previous information we had, around the time of hurricane Beryl in 2024, parametric box 16 required a minimum central pressure of 920mb or lower for any payout to come due, 17 was 926mb or lower, but as a storm approaches, box 11 requires 940mb or less and 12 would need 960mb or less (see box numbers here<\/a> and box pressures here<\/a>).<\/p>\n

As we understand it, these parametric box threshold figures still stand today.<\/p>\n

It is the central pressure and location of a hurricane that matters for the Jamaica cat bond, with the island and the surrounding sea broken into these parametric boxes for the IBRD cat bond\u2019s trigger.<\/p>\n

The lowest payout threshold possible is for a 30% triggering of the cat bonds $150 million of principal, while a more intense storm can cause a full payout just for entering a single box. Parametric boxes can also be additive, in that if a storm passes through more than one the payout for each can get added together, under certain circumstances.<\/p>\n

While hurricane Melissa has the potential to trigger the World Bank IBRD cat bond, it is impossible to be certain until the storm has passed through the parametric box arrangement and the pressure data is available.<\/p>\n

Finally, for this morning, there is some other exposure to named storms and hurricanes that impact Jamaica in the catastrophe bond market.<\/p>\n

There are a number of cat bonds, including some of the more recent Mystic Re<\/a> deals from Liberty Mutual, the Fuchsia cat bonds from Beazley<\/a>, SCOR\u2019s latest Atlas Capital DAC<\/a>, that do include cover for named storm losses in the Caribbean, including for Jamaica. But, the contribution to expected loss of a single Caribbean island is very small in all cases, as these cat bonds have been designed to cover losses from a hurricane that tracks through a number of Caribbean island, or where it tracks to the United States afterwards.<\/p>\n

So at this stage, it appears only the IBRD cat bond is really threatened by hurricane Melissa, given its expected track is to cross eastern Cuba after Jamaica, and then exit the Caribbean towards the Atlantic through the southeast Bahamas, a scenario that seems unlikely to accumulate sufficient losses for any of the other cat bonds with Jamaican exposure.<\/p>\n

While the notes of the IBRD cat bond covering Jamaica were marked down Friday, as we explained in our original article, we suspect it would be hard to trade today aside from at very distressed pricing levels unless the forecast improves.<\/p>\n

Update \u2013 Mon 27th October, 09:00 GMT<\/strong>: Hurricane Melissa has now intensified into a Category 5 storm, with sustained winds estimated at 160 mph and higher gusts.<\/p>\n

Minimum central pressure has fallen to 917mb.<\/p>\n

Some additional strengthening is still forecast for today, with fluctuations in intensity still expected prior to landfall in Jamaica.<\/p>\n

Both Jamaica and Cuba are expected to experience major hurricane impacts, while the southeastern Bahamas may experience hurricane force winds.<\/p>\n

Update \u2013 Mon 27th October, 15:30 GMT<\/strong>: Hurricane Melissa has continued to intensify, with sustained winds now estimated as high as 165 mph, with gusts reaching far higher.<\/p>\n

Melissa\u2019s central pressure has also continued to deepen, with the latest Air Force Reserve Hurricane Hunter aircraft recording data as low as 908mb.<\/p>\n

Fluctuations in intensity are still expected prior to landfall in Jamaica tomorrow, but Melissa is expected to remain an extremely powerful and dangerous major hurricane when it reaches the coast.<\/p>\n

Warnings for rainfall and surge remain as earlier today, with impacts to Jamaica expected to be particularly significant and the situation remaining very dangerous for its population that are in the path of hurricane Melissa.<\/p>\n

Specialist modelling and analytics firm Reask has published its latest short-range LiveCyc forecast, which provides some helpful context on the potential ramifications of major hurricane Melissa\u2019s impacts on Jamaica.<\/p>\n

CEO Jamie Rodney explained: \u201cAt the time of writing, the NHC forecast indicates a major hurricane landfall close to Treasure Beach, which could expose:<\/p>\n

\u2013 30% of the population to high wind gusts (176\u2013225 kph)
\n\u2013 Nearly 3% of the population to catastrophic wind speeds (>225 kph)<\/p>\n

\u201cWhilst track uncertainty has reduced. Our Reask scenario spread highlights a range of possible wind speed outcomes and population impacts:<\/p>\n

\u2013 A landfall closer to Kingston could increase population exposure to high winds to around 40% with a worst-case scenario impacting 20% of the population with catastrophic winds.<\/p>\n

\u2013 Using the forecast probabilities 50% of the population has a 50% chance of experiencing Category 1 or higher equivalent winds (as shown by the last animation panel).\u201d<\/p>\n

Given the further deepening of hurricane Melissa and the lower central pressure, it perhaps elevates the chances that Jamaica\u2019s World Bank cat bond is activated by this storm, when it passes into the parametric box arrangement.<\/p>\n

Sources suggest that unless Melissa weakens meaningfully on approach, there is a high chance a triggering event could occur, based on current observed data and the latest forecast advisory information.<\/p>\n

Update \u2013 Mon 27th October, 18:00 GMT<\/strong>: Hurricane Melissa has intensified even further, with the latest NHC data indicating sustained wind speeds of 175 mph and a minimum central pressure that has fallen to 906mb according to hurricane hunter aircraft data.<\/p>\n

Hurricane-force winds currently extend outwards up to 30 miles (45 km) from the center and tropical-storm-force winds extend outward up to 195 miles (315 km).<\/p>\n<\/blockquote>\n

You can track this and every Atlantic hurricane season development using the tracking map and information on our dedicated page<\/a>.<\/strong><\/p>\n

Jamaica cat bond marked down. Hurricane Melissa forecast for intense major landfall<\/a> was published by: www.Artemis.bm<\/a>
\nOur catastrophe bond deal directory<\/a>
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This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred. Jamaica\u2019s $150 million IBRD CAR Jamaica 2024 parametric World Bank catastrophe bond has been marked down on secondary pricing sheets and the US National Hurricane Center forecast cone still shows a major hurricane Melissa landfall. This article was […]<\/p>\n","protected":false},"author":1,"featured_media":914,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[],"_links":{"self":[{"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/posts\/912"}],"collection":[{"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/comments?post=912"}],"version-history":[{"count":3,"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/posts\/912\/revisions"}],"predecessor-version":[{"id":916,"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/posts\/912\/revisions\/916"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/media\/914"}],"wp:attachment":[{"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/media?parent=912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/categories?post=912"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/fictionuncovered.com\/index.php\/wp-json\/wp\/v2\/tags?post=912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}