NEW YORK (Bloomberg) — Catastrophe bond sales are set to remain high this year after lower prices and a quiet hurricane season produced a record fourth quarter, according to Risk Management Solutions Inc.

Eight bonds totaLling almost $1.1 billion eclipsed the $600 million issued in the fourth quarter of 2007, the Newark, California-based company, which builds models to predict hurricane damage, said today in an e-mailed statement.

The cost of issuing cat bonds dropped by as much as 40 percent in the last six months, boosting purchases of the securities used to reduce potential claims from natural disasters, RMS said. The maturing of existing cat bonds will fuel new issuance in 2010 with as much as 80 percent of the $5 billion of securities expiring this year yet to be renewed, the company said.

"More companies have put their toes back in the water after a slow start in 2009," said Robert Stone, a director with RMS's investment-linked securities team. "Activity looks set to remain high in 2010 as a record volume of catastrophe bonds is due to mature."

After record issuance of about $7 billion in 2007, the value of issued cat bonds, an alternative to reinsurance, fell by more than half in 2008, according RMS. Sales in 2009 rebounded to more than $3 billion.

Cat bonds posted a record gain last year after the US escaped major storm damage. Demand for the bonds "tends to increase" when you don't have losses, Chris Klein, global head of business intelligence at Marsh & McLennan Cos.'s reinsurance brokerage Guy Carpenter & Co., said on December 30.