A catastrophe note issued under US Rule 144A, tradable among qualified investors and carrying a full prospectus.
The 144A cat bond is the reference form of the public catastrophe note market: issued under a US regime that exempts registration while permitting resale among qualified institutional buyers, it comes with a detailed offering circular and a risk analysis from an independent modeling firm. The problem it solves is liquidity: an instrument that cannot be resold demands a high illiquidity premium and attracts only investors able to lock capital up to maturity. The 144A regime creates a genuine secondary market, with market makers and quotes, which broadens the investor base considerably and lowers the spread required. The cost is issuance expense and time: full documentation, independent analysis, sometimes a rating, for a size that rarely justifies the exercise below one hundred million. That is what gave rise alongside it to lighter private formats, for smaller deals or unusual structures.
A 250 million dollar 144A issue in 2026 takes four months to prepare and about 1.6 million dollars of fixed costs, that is 64 basis points of principal. The note then trades in the secondary market at an average bid-ask spread of 70 basis points. A 30 million private deal by the same sponsor takes five weeks for 210,000 dollars of costs, but cannot be resold.
144A cat bond, Cat bond public, Rule 144A catastrophe bond, Titre 144A