# Catastrophe Bonds

**IRI:** https://folio.openlegalstandard.org/R7ROqnkjkzSNTuRIsd5OPqw

## Labels

**Preferred Label:** Cat Bonds

**Alternative Labels:**

- Disaster Bonds
- Insurance-Linked Securities
- Risk-Linked Securities

## Definition

Catastrophe bonds, commonly known as cat bonds, are high-yield debt instruments designed to raise money for insurance companies in the event of a natural disaster. These bonds provide insurers with an alternative source of capital to cover significant losses from catastrophes, transferring some of the financial risk to investors who receive regular coupon payments unless a specified catastrophe event occurs.

## Sub Class Of

- https://folio.openlegalstandard.org/RCwe6IUx1b5fuhKW0fivDZu

## See Also

- https://folio.openlegalstandard.org/RCksXAlY9lRN16wERqZZ8Tk

**Deprecated:** False