NEW YORK–Catastrophe bond market activity is set to fall from a lofty peak of $4 billion in issuances in 2006, but the market will remain strong in 2008 and move in different directions, experts said here.

During the opening session of the “Standard & Poor's Insurance-Linked Securities Conference” last week, Rodney Clark, managing director of S&P's Financial Institutions group, noted that the level of issuance for bonds linked to natural catastrophes jumped to over $4 billion in 2006 from just over $1.5 billion in 2005–with the U.S. hurricane events of 2005 driving the boost in activity.

With such hurricanes becoming a more distant memory in 2007, the issuance level fell to about $3.8 billion last year, he said. (The figures he cited only include catastrophe bonds rated by S&P.)

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