A World Bank bond designed to deliver funding to help the world's poorest c...
LONDON - A World Bank bond designed to deliver funding to help the world’s poorest countries to tackle fast-spreading diseases has lost half its value as the coronavirus outbreak in China has fanned fears that investors could face hefty losses.
However, the World Bank’s two so-called pandemic bonds came under scrutiny after the second-worst Ebola outbreak on record. With the coronavirus outbreak having infected more than 74,000 people and claimed more than 2,000 lives, prices for the IBRD pandemic bond with the highest investment risk - the Class B notes - have come under increasing pressure.Losses to investors depend on the number of deaths and geographical spread.
“We all get the feeling that epidemics have become more and more frequent - we had SARS and Ebola and swine flu all within a short space of time.” The second of the bonds - a $225 million issue XS164110117=- is also exposed to a coronavirus outbreak but considered less at risk because its different trigger criteria means bondholders face a loss of 16.7%.For all the good intentions and the prospect that a payout to poor countries might be on the cards, the bonds remain under fire for failing to deliver sufficient or timely aid.
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