$425M in World Bank catastrophe bonds set to default if coronavirus declared a pandemic by June
(Worthy News) – Investors betting big against catastrophic diseases are watching the World Health Organization closely as insurance bonds tied to whether the organization labels COVID-19 a pandemic are set to mature in June.
In 2017, the World Bank designed a new way to raise money: Pandemic Emergency Financing bonds. Over $425 million worth of such bonds, which bet against a global outbreak of infectious diseases and will default if WHO declares the coronavirus a pandemic, were sold by the World Bank in its first-ever issuance of catastrophe bonds. In the event of no pandemic, investors would be paid a healthy annualized return. Meanwhile, the World Bank could use the bonds to insure itself against the risk of a global outbreak. [ Source: Washington Examiner (Read More…) ]
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