Following the successful issuance of the Asian Development Bank’s (ADB) first catastrophe bond offerings, Roberta Casali, Vice-President for Finance and Risk Management at the ADB has explained how the cat bonds will provide committed financing for disasters and said she hopes the first ADB cat bonds will “pave the way for future issuances.”
We’ve been following the ADB’s journey into the catastrophe bond market for the first time since we revealed it was planning its first catastrophe bonds back in November 2025.
On April 3rd, we highlighted an initial offering size of $150 million equally split between two individual cat bond note issuances, one for each of the Kyrgyz Republic and Tajikistan.
A few days later we sourced and reported further information on the structures, their parametric triggers, the risk modelling and the risk metrics associated with these two ADB cat bond issuances.
On April 24th we revealed that the ADB cat bonds were expected to upsize slightly, with as much as $160 million of risk transfer limit sought for the two member countries, while the risk-margin price guidance had risen to the upper-ends.
Now, with issuance of the notes reaching settlement on April 30th, the Asian Development Bank has this morning hailed its first successful catastrophe bonds, explaining more detail on their distribution to investors, and highlighted the important role cat bonds could play going forwards for the Bank and its member countries, in providing access to efficient and responsive disaster risk financing.
The cat bonds, which the ADB terms Disaster Relief Bonds (DRB), have been placed as part of its Risk-Layered Disaster Relief Finance Program, which consists of a combination of Contingent Disaster Financing (CDF) and these Disaster Relief Bonds (DRB).
The notes were issued through the ADB’s own Global Medium-Term Note Program, as Capital at Risk notes, meaning a special purpose insurance vehicle was not required, with the securities issued via the ADB’s own treasury facilities.
This morning, the ADB said the first cat bonds will aim to, “reduce the financial impact of natural hazards and climate-related shocks. The bonds are designed to protect against severe disasters and provide quick liquidity to the Kyrgyz Republic and Tajikistan following a qualifying event.”
Commenting on the rationale for the cat bonds, ADB Vice-President for Finance and Risk Management Roberta Casali explained, “When a major earthquake or flood strikes, it can set back development by years. With this inaugural sovereign catastrophe bond, our developing member countries in Central Asia gain rapid, committed financing when disaster hits, so they can build back faster.”
Casali also indicated that the cat bonds are seen as a first example of an important disaster risk financing tool for the ADB, as it looks to further support its member countries.
“This bond will pave the way for future issuances, and over time deepen investor engagement in this dynamic region,” she explained.
The ADB highlighted how the cat bonds are integrated into social protection for its two member country beneficiaries to the deals, “The DRBs will provide rapid and targeted financial support following severe earthquake or flood events, based on predefined and independently verified parametric triggers. After a qualifying disaster in either country, proceeds will be disbursed through national social protection systems to support affected populations, particularly the most vulnerable.”
Both the $80 million Kyrgyz Republic cat bond and the $80 million Tajikistan cat bond have coupons (per annum) consisting of compounded Secured Overnight Financing Rate (SOFR) plus a funding margin of 4 basis points plus a risk margin of 600 basis points, with each priced at par with a maturity date of 30 May 2029.
Aon Securities LLC acted in the roles of dealer, initial purchaser, and sole bookrunner for the first ADB cat bonds, with Munich Re acting as sole structuring agent.
The ADB said that the two cat bond issues “achieved wide primary market distribution.”
The Kyrgyz Republic capital-at-risk notes saw 64% of the bonds placed in Europe and 36% in the Americas.
By investor type, 37% of the Kyrgyz Republic notes were placed with specialised insurance-linked securities funds, 32% went to insurance and reinsurance companies, and 31% to other investment fund managers.
The Tajikistan capital-at-risk notes saw 60% of the bonds were placed in Europe and 40% in the Americas.
By investor type, 36% of the Tajikistan notes were placed with specialised insurance-linked securities funds, 33% went to insurance and reinsurance companies, and 31% to other investment fund managers.
The first disaster relief bond project for the ADB was supported by the Asian Development Fund, the Asia Pacific Climate Financing Fund, and the Monetary Authority of Singapore’s Insurance-Linked Securities Grant Scheme, with the notes now set to be listed on the Singapore Exchange.
During the preparation work for the cat bond transactions, the ADB worked with the Kyrgyz Republic and Tajikistan to support them both through a dedicated regional technical assistance under the Central Asia Regional Economic Cooperation Program, while analytical and advisory work was undertaken by an international consortium led by WTW.
Commenting on the successful completion of the first ADB cat bond issuance, Jordan Brown, Managing Director, Asia Pacific at Aon Securities, said, “We are delighted by the strong response from the global investor community, whose support has further enabled the transfer of sovereign disaster risk from the public to private sector.”
Leonie Schubert, Global Head of Capital Partners at Munich Re, added, “Munich Re is honored to have supported ADB’s inaugural Disaster Relief Bonds. We congratulate ADB on these innovative, tailor-made, and successful capital market risk transfers, which introduce perils from a new region to the catastrophe bond market, thereby pushing the boundaries of insurability.”
Christopher Au, Senior Director at WTW further stated, “This risk-layered approach provides each country with financing options at different event severities, whilst the link to the social protection system is designed to ensure DRB payouts reach those who are most affected.”
You can read all about these first Asian Development Bank catastrophe bonds in our extensive cat bond Deal Directory, listed as Asian Development Bank – Kyrgyz Republic 2026 and Asian Development Bank – Tajikistan 2026.
