Catastrophe bonds, long associated with the US insurance market, are drawing rising interest worldwide as governments and financial institutions search for ways to manage the escalating costs of natural disasters. These high-yield securities, designed to transfer disaster-related risks from issuers to investors, are seeing renewed demand despite their complex structure and elevated risk profile.

The bonds, first developed in the 1990s, are typically issued by governments, insurers, or reinsurers. Investors earn attractive returns so long as no major disaster triggers a payout. If the event occurs, issuers retain the capital to cover damage costs, leaving investors with losses. For countries frequently hit by storms, wildfires, and floods, the products offer access to capital that can ease pressure on public budgets at a time when international aid flows are tightening.

“Cat bonds provide access to capital that is more flexible than on-balance sheet funding and can be directed toward specific risks,” said Brandan Holmes, senior credit officer at Moody’s Ratings. He said the instruments can also be less expensive than traditional reinsurance, offering governments and insurers another tool to manage climate-related losses.

Recent storms have highlighted the role these securities can play. Jamaica is set to receive a $150 million payout from a World Bank-backed program after Hurricane Melissa this year, a sharp contrast to last year’s Hurricane Beryl, when air pressure levels remained above the threshold required to trigger its bond’s protection.

Investors have also been drawn to the sector. Cat bonds offer yields that exceed those available on typical fixed-income assets, and they often move independently of broader financial markets, creating diversification benefits. The bonds also tend to have shorter maturities, which can give investors greater flexibility in shifting their portfolios. Data from Artemis shows the global market now totals roughly $58 billion (€50 billion), with the sector recording strong returns in 2023 and 2024.

However, analysts warn that the product’s intricate trigger conditions demand expertise. Losses can result from mid-sized disasters that fall short of headline-grabbing hurricanes. “You need a strong grasp of the risks being transferred,” said Maren Josefs, credit analyst at S&P Global, noting that tornadoes, wildfires, and floods have caught some investors off guard in recent years.

Cat bonds remain the domain of institutional investors, but access for individuals is slowly expanding. Earlier this year, the first exchange-traded fund focused on catastrophe bonds debuted on the New York Stock Exchange, allowing retail investors indirect exposure. In the EU, individuals can gain limited exposure through UCITS mutual funds, though the bonds themselves are restricted to qualified investors.

That access may tighten. The European Securities and Markets Authority advised the European Commission this year that UCITS funds should limit cat bond exposure to 10%, cautioning that higher levels could blur distinctions between traditional funds and alternative investment vehicles. The Commission will assess the issue in 2026 after further consultations.

While European demand remains modest, some analysts believe interest could rise if climate-driven disasters become more frequent in the region. For now, cat bonds remain a niche but growing tool for managing the financial fallout of an increasingly volatile climate.

German sportswear brand Puma saw its shares rise more than 14% in Frankfurt on Thursday after reports emerged that China’s Anta Sports is exploring a takeover.

Bloomberg News reported that Hong Kong-listed Anta has been working with advisers to evaluate a potential bid for Puma. The company may partner with a private equity firm if it decides to move forward. Other potential suitors mentioned in media reports include Chinese rival Li Ning and Japanese sportswear firms such as Asics.

Li Ning told Euronews that it remains focused on its own brand strategy and has not engaged in any substantive discussions regarding a Puma acquisition. Asics did not immediately respond to requests for comment, while Anta and Puma declined to comment.

The takeover interest comes as Puma navigates a difficult financial period. The German company, which employed around 20,000 full-time staff at the start of 2025, has lost more than three-quarters of its market value over the past five years amid intense competition in the global sportswear sector.

Puma has faced challenges from US tariffs on China and Vietnam, key manufacturing hubs for the brand, which have squeezed profit margins. Analysts have also criticised Puma’s slow response to trends such as the retro trainers craze. Its Palermo and Speedcat shoes lagged behind Adidas’ successful Samba and Gazelle relaunches.

In its third-quarter earnings report, Puma noted that volatile geopolitical and macroeconomic conditions, along with muted brand momentum, shifts in sales channels, elevated inventory levels, and tariff pressures, would continue to weigh on performance for the remainder of 2025.

CEO Arthur Hoeld, appointed in spring as part of a leadership shake-up, has launched a transformation plan aiming to restore growth by 2027. The plan includes reducing Puma’s product range, restructuring its wholesale approach to prioritise direct-to-consumer sales, and cutting 1,400 jobs so far this year, including 900 announced in October.

Despite renewed takeover interest, any acquisition could face resistance from France’s billionaire Pinault family. The family’s holding company, Artémis, owns about 29% of Puma, a stake acquired from Kering in 2018. Earlier this year, Artémis said it was considering all options for the shares.

The potential deal highlights growing interest from Chinese and Asian investors in European sports brands, particularly those struggling to regain market share. For Puma, a takeover could offer a path to financial stability and strategic investment, while raising questions about the future direction of the German brand’s operations and management.

With shares already jumping on the news, market watchers will be closely observing whether Anta or other bidders make a formal offer, and how Artémis responds to any proposal for the significant stake it controls in Puma.

Europe’s second-largest carmaker, Stellantis, and Chinese electric vehicle (EV) battery giant CATL have started construction on a €4.1 billion lithium iron phosphate (LFP) battery factory in northeastern Spain. The joint venture, located in the Aragon region, is expected to create 4,000 jobs and supply EVs across Europe.

The project, first announced last year, marks one of the largest Chinese industrial investments in Spain. At a groundbreaking ceremony on Wednesday, executives highlighted the plant’s strategic role in supporting Europe’s energy transition and industrial modernization.

Andy Wu, CEO of the joint venture, declined to confirm media reports suggesting that up to 2,000 Chinese workers may be involved in construction, stating that final staffing numbers will be determined as subcontractors are selected.

Spanish Minister of Industry, Trade and Tourism Jordi Hereu described the plant as a “strategic milestone” and emphasized the strong collaboration between Spanish and Chinese companies. He said the project underscores Spain’s role in advancing Europe’s electrification goals and strengthening its industrial base.

The facility will operate entirely on renewable energy and is scheduled to begin production by the end of 2026. Once operational, it is expected to produce 50 gigawatt-hours of LFP batteries per year, enough to power tens of thousands of electric vehicles annually.

Spain has maintained a relatively open approach to Chinese investment compared with some other EU nations. Last year, the country generated more than half of its electricity from renewable sources and relies on imported critical raw materials, solar panels, and green technologies to accelerate its shift from fossil fuels.

CATL, the world’s largest EV battery manufacturer, has a growing footprint in Europe. The company already operates a production facility in Erfurt, Germany, which has been active since 2022, and is preparing for full-scale output in Debrecen, Hungary. CATL’s customers include Tesla, BMW, and Volkswagen, and the company continues to expand its influence across the global EV supply chain.

The Chinese firm also invests heavily in large-scale mining projects for lithium, nickel, and cobalt, both in China and abroad, including ventures in Indonesia and Bolivia. These investments provide CATL with significant control over critical materials needed for EV batteries, enhancing its strategic position in the global market.

The Aragon factory is expected to boost Spain’s manufacturing sector, contribute to Europe’s electric mobility ambitions, and strengthen supply chains for critical battery materials. The project represents a significant step for both Stellantis and CATL as they position themselves at the forefront of Europe’s EV transition.