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Started By
Message
re: Coronavirus Disease 2019 (COVID-19) ***W.H.O. DECLARES A GLOBAL PANDEMIC***
Posted on 2/26/20 at 11:59 am to upgrayedd
Posted on 2/26/20 at 11:59 am to upgrayedd
$425M in World Bank catastrophe bonds set to default if coronavirus declared a pandemic by June
I find it crazy that investors are betting on this type of thing, but I guess I shouldn’t be surprised.
quote:
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.
I find it crazy that investors are betting on this type of thing, but I guess I shouldn’t be surprised.
7
Posted on 2/26/20 at 12:05 pm to WaWaWeeWa
quote:
I find it crazy that investors are betting on this type of thing, but I guess I shouldn’t be surprised.
It's crazy and genius at the same time, but also seems ripe for corruption.
Posted on 2/26/20 at 12:11 pm to WaWaWeeWa
quote:
I find it crazy that investors are betting on this type of thing, but I guess I shouldn’t be surprised.
Banks wanted money off gambling too I guess
Posted on 2/26/20 at 12:21 pm to WaWaWeeWa
Wow given how subjective the call is and how embittered the debates have been in the past on the timing of it...this won’t cause problems at all. Nope.
Posted on 2/26/20 at 12:36 pm to WaWaWeeWa
quote:
will default if WHO declares the coronavirus a pandemic
So what are the criteria for the WHO to declare a pandemic? Do they have exact numbers written down somewhere, or is this a judgment call?
This post was edited on 2/26/20 at 12:37 pm
Posted on 2/26/20 at 1:08 pm to WaWaWeeWa
So what you’re saying is... WHO will wait u til after June to call it a pandemic
Posted on 2/26/20 at 1:16 pm to WaWaWeeWa
Pass on World Bank.
I'll take my action to the the Beau Rivage.
I'll take my action to the the Beau Rivage.
Posted on 2/26/20 at 1:57 pm to WaWaWeeWa
I'm not sure default is the correct word. The world bank is gonna use those funds to pay countries in need instead of bondholders at maturity. Also it appears that they could get part of their money back in the event that all of the initial bond issue isn't used. It is an interesting concept. The class B bonds are paying 11.10 above 6 month Libor so roughly 13 percent. It isn't just for Corona viruses. There is a specific pandemic flu in the prospectus. On the class B bonds there are 4 other diseases included.
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