A longstanding leading issuer of munis, New York’s Metropolitan Transportation Authority (MTA) took an entirely new approach to the capital markets this past July: a catastrophe bond.

The $200 million deal came nine months after Hurricane Sandy, but the storm, in a sense, begat the bond, as the insurance market’s capacity re-trenched in the aftermath and the MTA scrambled for alternatives. This was a classic case of heaping insult on injury—the agency already faced a staggering price tag from Sandy. The most recent estimates put the total losses to the MTA incurred by Sandy to $5.1 billion.

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