Catastrophe Bonds Signal Coronavirus Nearing Pandemic Status
- Risky tranche at distressed level; safe tranche still near par
- World Bank bonds reached lows of 40 cents amid Ebola outbreak
Health personnel ride in an ambulance carrying passengers and crew from a Turkish Airlines plane from Tehran in Ankara, Turkey on Feb. 25.
Source: Getty Images
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The World Health Organization says the coronavirus isn’t yet a global pandemic. Bonds that insure against just such a catastrophe say that it probably is.
The bonds, sold in 2017 by the World Bank to raise money for poor countries in a global pandemic, are quoted as much as 40% below their face value following coronavirus outbreaks in countries such as Iran and Italy, according to investors who own the securities.