It’s margin call day everywhere, wow

$425M in World Bank Catastrophe Bonds Set To Default If Coronavirus Declared A Pandemic By June

READ  “Normally, only 2:1 margin is allowed. However, Robinhood traders are getting around this by using short dated out of the money calls options (with 15:1 margin). This has NEVER been the case, is new, and absolutely is what's driving up demand for TSLA's stock. When it reverses, it will be UGLY.”

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.”

www.washingtonexaminer.com/news/425m-in-world-bank-catastrophe-bonds-set-to-default-if-coronavirus-declared-a-pandemic-by-june

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