In what appears to be a milestone for the cat bond sector, GC Securities said it has placed the first catastrophe bond issued by the World Bank.

GC Securities (part of Guy Carpenter, itself a division of Marsh & McLennan Cos.) said the bond has a notional principal of $30 million and is issued by the International Bank for Reconstruction and Development, which is part of the World Bank.

The bond will help facilitate risk transfer for the Caribbean Catastrophe Risk Insurance Facility (CCRIF), which is a risk-pooling facility designed to reduce the financial impact of catastrophic earthquakes and hurricanes on 16 Caribbean countries. It offers three years of annual aggregate protection when those types of weather events hit.

Catastrophe bonds are becoming an increasingly common factor in the reinsurance industry, and this deal illustrates another way they’ve advanced. CCRIF hasn’t used the cat bond market until now, GC Securities noted in its release announcing the deal. This is also the first time that a World Bank institution has directly issued a catastrophe bond, GC Securities said.

“In the post-convergence market, capital markets capacity continues to offer an attractively priced and effective complement to the reinsurance market,” Guy Carpenter Vice Chairman David Priebe said in a statement.

Aidan Pope, CEO of Latin America and Caribbean Operations for GC Securities, said in a statement that the cat bond will help the CCRIF “develop new counterparty relationships and secure highly rated multiyear capacity at a fixed price that provides greater stability for its risk transfer program.”