(Bloomberg) -- Bonds sold by Mexico to shield it from the cost of repairing hurricane damage are closer to paying out after the biggest storm ever measured in the Americas struck the country last month, Standard & Poor’s said.

S&P cut its rating on the $100 million bonds to CCC- from B- after Swiss Reinsurance Co. Ltd. asked for a ruling on whether the storm met the conditions for Mexico to keep the money instead of paying it back on Dec. 4, when the debt falls due. The determination will be made by AIR Worldwide Corp., which serves as the calculation agent.

The last time Boston-based AIR Worldwide was asked to rule on the bonds, it took three months to do so, S&P said. Preliminary readings of atmospheric pressure from the National Hurricane Center suggests that the bonds will pay out at least 50%, if not 100%, the ratings company said.

“In the absence of any significant changes in the reported minimum central pressure by the National Hurricane Center, a default appears to be inevitable within six months,” S&P wrote in a statement.

The bonds will be triggered in full if the atmospheric pressure at the center of the storm was below or equal to 920 millibars. If it was 921 millibars to 932 millibars, they would pay out at 50%. By the time Patricia made landfall in late afternoon, the pressure was 920 millibars, according to the preliminary readings.

The beneficiary of the bonds is Fonden, Mexico’s disaster fund, via Agroasemex SA, a state-owned agricultural insurer.

Special Reports /

Mexico storm bond likely to pay after record hurricane, S&P says

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