DBRS Morningstar released a commentary entitled “Coronavirus Disease (COVID-19) to Trigger Pandemic Bonds” that discusses COVID-19’s expected impact on pandemic catastrophe bonds sponsored by the World Bank Group’s Pandemic Emergency Financing Facility (PEF).The key highlights include:

  1. The International Bank for International Reconstruction and Development established the PEF in 2017 to provide complementary funding for developing countries to cope with pandemics.
  2. Pandemic bonds will likely be triggered in the current COVID-19 outbreak, given latest mortality data.
  3. Market correlation and perceived cost versus the decision to invest in preventive measures within target countries will affect the future of pandemic bonds.

For a copy of the commentary, visit DBRS Morningstar.