The World Bank issued the Catastrophe Bond Mexico contracted for USD$150 million ( MXN$ 2.7 billion ) for the country's economic reactivation after the devastating earthquakes that hit the country, an 8.2-magnitude quake on Thursday, September 7 , followed by a 7.1-magnitude quake on Tuesday, September 19 .
Mexico's Ministry of Finance and Public Credit
( Secretaría de Hacienda y Crédito Público abbreviated SHCP ) informed that technical and geological evaluations (latitude, length, magnitude, depth) have ended today.
The payment will be received by Mexico's National Disaster Fund ( Fondo de Desastres Naturales abbreviated Fonden ) to channel additional resources for the reconstruction of schools, hospitals, highways, and houses.
The Catastrophe Bond was renewed as a risk transfer mechanism on August 4 . This mechanism called Catastrophic Bond " Fonden Cat 2017 ", provides protection to the assets of the FONDEN Trust for 3 years .
The Catastrophe Bond provides USD$150 million in earthquake coverage , USD$110 million in hurricane coverage on the Atlantic coast and USD$110 million in hurricane coverage on the Pacific coast .
In this transaction, it stands out that a total of 37 investors participated .
Catastrophic coverage is a national risk transfer policy strategy to maintain strong public finances. Mexico has a comprehensive risk management structure and a solvent insurance sector that will enable the country to cope with the recent natural disasters.
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