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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Event-Linked Bonds: Competing Against A Catastrophe |
SFGate - April 4, 2011 - by Glenn Curtis
For most investors, the word "bond" conjures up images of traditional corporate, convertible or government bonds. However, there is another type of debt instrument in the marketplace that's growing in popularity. It's known as the "event-linked bond". In this article, we'll take a look at event-linked bonds, and show how and why they are used.
The Evolution of Event-Linked Bonds
Event-linked bonds are a way for reinsurance companies to obtain funding, and at the same time mitigate their risk against a major claim or catastrophe. In fact, that's why investors often refer to these bonds as catastrophe bonds (CAT). These bonds came on the scene in the mid-1990s, as insurance and reinsurance companies found themselves looking for ways to offset risks associated with major events, such as the damage caused by a natural disaster.
The use and popularity of these bonds is expected to increase, as insurers are faced with large monetary claims thanks to rising property (and other asset) values. In addition, some believe that due to global warming the frequency and/or strength of hurricanes and other storms may continue to increase - creating a growing need for companies to protect themselves.
How They Work
Reinsurance companies pay high rates of return (some bonds can carry double-digit yields) to spread the risk of a major hurricane, earthquake or other catastrophic event among many investors. Because of this, event-linked bonds are generally a high-risk, high-reward proposition. And while individual investors can participate, they usually do so through managed products such as mutual funds. However, there is a little catch that makes event-linked bonds somewhat unique when compared to other bonds.
The catch is, should a major event occur, the insurance company may use the investor's principal to pay off claims. So in essence, the investor in wagering that such an event will not occur. This risk can offset the attractive yields these bonds typically pay.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/04/04/investopedia3007.DTL#ixzz1IZLVV7pb
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Income Security Recommendation January 2013 Issue.
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