Posted on 03/11/2020 4:44:08 PM PDT by Enlightened1
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.
“As an investor, we do not want to lose money,” said Chin Liu, a portfolio manager at Amundi Pioneer, a Boston-based firm that purchased the bonds as a way to diversify the company's $1 billion catastrophe fund. “But then, we also understand if it’s unfortunately triggered, it benefits every single person, including ourselves, to keep the virus controlled.”
For large-scale investors looking for above-average returns in a bloated market, the bonds were the next logical place to hedge against disaster. At the time of issuance, then-World Bank President Jim Yong-Kim heralded the bonds as an opportunity to leverage "capital market expertise to serve the world’s poorest people."
The bonds were administered in two tranches, with Class A bond investors receiving a return of 6.9% annually. Class B bond investors received 11.5% annually. The World Bank raised $225 million in Class A bonds and $95 million in Class B bonds.
The investors, mainly endowments and pension funds, have long bet against natural disasters such as hurricanes,
(Excerpt) Read more at washingtonexaminer.com ...
WHO declares coronavirus a pandemic; White House considers moving all of Europe to restrictive travel advisory
The World Health Organization on Wednesday declared coronavirus a pandemic, reflecting concern from WHO that countries arent working quickly and aggressively enough to contain the virus.
Interesting...B U T wasn’t it already declared to be a pandemic?
So what now?
The World Bank gets to keep the money (and pay a kickback to the WHO?)
Asking for a friend./s
Doesnt sound good.
It has been declared a pandemic by WHO three times now.
Follow the money?
$425 mm is BIG BUX going to a buncha numbered Swiss accounts!
Just 425 million?
I kept hearing about these for the past week and thought it was some massive dollar figure in the billions.
I dont mean to scoff but thats chicken feed compared to the amount now lost in the market - let alone the US budgeting 20 times that amount - initially - for the outbreak.
But has it reached Whoopie level?
I guess the $8.3 billion can be used to cover it though
In 2017, the World Bank designed a new way to raise money: Pandemic Emergency Financing bonds.
—
That worked well.
Experts!
Ping
I'd bet that a big chunk of the defaulted/scammed money will go to a certain lab director in Wuhan... Just saying...
“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.”
It kind of makes one wonder if the World Bank had a certain knowledge of the future.
What the hell kind of bet is that? All these crazy derivative trades are what nearly broke us in 2008. I guess it is some kind of way to raise money, they take the $425 million and if there is no pandemic they keep the money (for what purpose? to save it for a future pandemic? Or waste it on overhead and travel? ). And if not, what? The Wolrd Bank is gambling? What am I missing?
Not too much difference in the way Lloyds of London worked when it insured ships with private investors.
The only thing is I would have taken the other side of that bet, the odds are that a pandemic can break out anytime.
Folks this article is from February 26th. Some folks bet wrong.
And certain Democrat operatives!
Thanks for the date update. The World Bank may have invested in the Stock Market.
The $425 million in cash was invested in derivatives, worth $ quadrillion. If they default on the principal, the World Bank collapses.
"Pretty good considering we don't even know what 'pandemic' means."
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