A World Bank bond designed to deliver funding to help the world’s poorest countries tackle fast-spreading diseases has lost half its value as investors fear hefty losses caused by the coronavirus outbreak in China. The World Bank launched bond and insurance instruments in 2017 following the 2013 to 2016 Ebola outbreak in Sierra Leone, Guinea and Liberia, which killed at least 11,300 people. Launched under the bank’s Pandemic Emergency Financing umbrella in 2017, these instruments were designed to be speedily employed where needed. However, the so-called pandemic bonds came under fire after the second-worst Ebola outbreak on record, which raged in the Democratic Republic of the Congo and killed more than 2,000 people without the release of funds to help affected countries. The bonds, issued by the World Bank’s International Bank for Reconstruction and Development (IBRD), offer investors high coupons in return for the risk of having to forgo some or all their money in the event of pandemic outbreaks of a number of infectious diseases. 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.
SOURCE: AL JAZEERA
