The Asian Development Bank (ADB) has issued its first Disaster Relief Bond (DRB) offerings, also known as catastrophe bonds, with two transactions covering earthquake and extreme precipitation risks in Tajikistan and the Kyrgyz Republic.
The DRBs will provide rapid and targeted financial support to both countries following severe earthquake or flood events, based on predefined and independently verified parametric triggers.
Following a qualifying disaster, proceeds will be disbursed through national social protection systems to support affected populations, particularly the most vulnerable.
Roberta Casali, Vice-President for Finance and Risk Management at ADB, said, “When a major earthquake or flood strikes, it can set back development by years.
“With this inaugural sovereign catastrophe bond, our developing member countries in Central Asia gain rapid, committed financing when disaster hits, so they can build back faster. This bond will pave the way for future issuances, and over time deepen investor engagement in this dynamic region.”
Both issuances are $80 million in size and will run across a three-year term, with a maturity date of 30th May 2029.
The DRB for the Kyrgyz Republic has a coupon (per annum) comprised of the compounded Secured Overnight Financing Rate (SOFR), plus a funding margin of 4 basis points and a risk margin of 600 basis points.
The DRB for Tajikistan has a coupon (per annum) comprised of the compounded SOFR plus a funding margin of 4 basis points and a risk margin of 600 basis points.
Aon Securities LLC acted as dealer, initial purchaser, and sole bookrunner, with Munich Re acting as sole structuring agent.
Both tranches achieved wide primary market distribution. For the Kyrgyz Republic DRB, 64% of bonds were placed in Europe and 36% in the Americas. By investor type, 37% went to specialised insurance-linked securities funds, 32% to insurance/reinsurance companies, and 31% to fund managers.
For the Tajikistan DRB, 60% of bonds were placed in Europe and 40% in the Americas. By investor type, 36% went to specialised insurance-linked securities funds, 33% to re/insurance companies, and 31% to fund managers.
The notes will be listed on the Singapore Exchange.
The project is supported by the Asian Development Fund, the Asia Pacific Climate Financing Fund, and the Monetary Authority of Singapore’s Insurance-Linked Securities Grant Scheme, which is funded by the Financial Sector Development Fund.
To prepare for the transactions, ADB supported the Kyrgyz Republic and Tajikistan through dedicated regional technical assistance under the Central Asia Regional Economic Cooperation Program. The analytical and advisory work was conducted by an international consortium led by WTW.
To read more information about ADB’s Kyrgyz Republic 2026 or Tajikistan 2026 cat bonds, or other catastrophe bonds and related ILS transactions, visit our sister publication Artemis’ Deal Directory.
“We are delighted by the strong response from the global investor community, whose support has further enabled the transfer of sovereign disaster risk from the public to private sector,” said Jordan Brown, Managing Director, Asia Pacific at Aon Securities.
“Munich Re is honoured to have supported ADB’s inaugural Disaster Relief Bonds. We congratulate ADB on these innovative, tailor-made, and successful capital market risk transfers, which introduce perils from a new region to the catastrophe bond market, thereby pushing the boundaries of insurability,” added Leonie Schubert, Global Head of Capital Partners at Munich Re.
“This risk-layered approach provides each country with financing options at different event severities, whilst the link to the social protection system is designed to ensure DRB payouts reach those who are most affected,” said Christopher Au, Senior Director at WTW.
