California wildfire blindsides cat bondholders
The frequency of devastating wildfires has rocketed in California over the past two years. Camp Fire, still burning through California, looks set to wipe out a catastrophe bond, leading to sharp questions about how to model and price an emergent risk to companies, buildings and people when this is bundled out to the capital markets.
The catastrophe bond is bid at close to zero on the expectation that its sponsor, utility firm PG&E, will be found liable for the devastating Camp Fire.Camp Fire is the most damaging wildfire in California’s history. It had caused 83 deaths and destroyed more than 18,000 buildings and ...
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