The Asian Development Bank’s (ADB) first catastrophe bond offerings have now been successfully priced in the market, with the result being a $160 million capital market-backed source of parametric earthquake and extreme precipitation disaster risk financing, evenly split between the Kyrgyz Republic and Tajikistan.
It’s an important first step in the catastrophe bond market for the Asian Development Bank (ADB) and its member countries, as the multilateral development bank has now proven the concept of issuing what it has termed Disaster Relief Bonds (DRB) to benefit two of its members, securing efficient disaster risk financing from institutional and insurance-linked securities (ILS) investors.
We first reported back in November 2025 that the ADB was planning its first catastrophe bonds for the Kyrgyz Republic and Tajikistan. Then in February 2026 we revealed that the cat bonds would be designed to cover earthquake and flood risks on a parametric trigger basis for the two countries.
The resulting cat bond issuances then emerged and we first covered them on April 3rd, highlighting 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.
Earlier this week, we revealed that the ADB cat bonds were targeted 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, we can report that the upper-end size target of $80 million each for the first two catastrophe bonds to be issued by the ADB has been achieved, while the risk margin the notes will pay investors has now been priced and finalised at the upper-end of initial guidance.
As a result, the Kyrgyz Republic and Tajikistan are now set to become beneficiaries of $80 million each of earthquake and extreme precipitation focused parametric risk transfer, with that coverage split into $70 million of sub-limit for earthquakes and $10 million for the precipitation related risk.
With pricing now finalised, the Asian Development Bank – Kyrgyz Republic 2026 catastrophe bond capital-at-risk notes are to be issued at $80 million in size. The notes have an initial expected loss of 2.296% and were first offered to investors with guidance for a risk margin (or risk interest spread) of between 5.25% and 6%, which was updated to the top-end at 6%, which is where we are told they have now been priced.
In addition, the Asian Development Bank – Tajikistan 2026 catastrophe bond capital-at-risk notes are also set to be an issuance of $80 million in size. These have an initial expected loss of 2.011% and were also initially offered to investors with guidance for a risk margin (or risk interest spread) of between 5.25% and 6%, which was also later updated at the upper-end of 6% and has now been priced at that level.
Recall that, the notes or securities of these first two parametric cat bond issuances from the Asian Development Bank for its members are being issued through its own Global Medium-Term Note Program, as Capital at Risk notes.
That means a special purpose insurance vehicle is not required, with the securities issued via the ADB’s own treasury facilities.
The notes will provide an important component of the disaster risk financing under an ADB project named the Risk-Layered Disaster Relief Finance Program, which will consist of a combination of Contingent Disaster Financing (CDF) and these Disaster Relief Bonds (DRB).
We understand that these two ADB issued cat bonds will now have their notes listed on the Singapore Stock Exchange.
That will enable the ADB to benefit from the Monetary Authority of Singapore’s (MAS) catastrophe bond and insurance-linked securities (ILS) grant scheme, with that money being able to support the grant funding required to pay the issuance costs and premiums for these two cat bond issues.
We understand grants have already been agreed and signed by the finance ministers or equivalent of each beneficiary country to these cat bonds.
Settlement is now slated for next week, when Aon Securities (as initial purchaser) will purchase the $80 million of Kyrgyz Republic and $80 million of Tajikistan floating rate Disaster Relief Capital at Risk Notes, at which stage they will be distributed to the ILS funds and cat bond investors supporting these landmark first ADB cat bond issues.
It’s encouraging to see these first cat bond issuances from the Asian Development Bank successfully priced and now moving on to their settlement and sale to investors, as it underscores the ability of the catastrophe bond market to support the risk transfer needs of countries in Central Asia, as well as investors and fund manager’s ability to support an unmodelled peril (the precipitation risk) and the earthquake peril in a region that is new to the cat bond market, as well as different data sources and reporting in some cases.
We hope these prove to be the first in a series of issuances by the Asian Development Bank, which counts among its members many countries that carry meaningful exposure to the impacts of natural disasters and severe weather events.
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.
