Daily Management Review

Investors pour over $150B into "coronabonds"


Governments, banks and companies around the world, as well as international organizations, raised a total of $ 151.1 billion from the sale of bonds issued to combat the effects of the novel coronavirus pandemic as of May 31, according to a study by BNP Paribas.

Among the companies that issued such bonds since February are pharmaceutical giant Pfizer Inc. and banks, particularly, Bank of America Corp. and Bank of China.

Bonds associated with the coronavirus pandemic are currently more interesting than traditional bonds, says Agnes Gourc, co-director of sustainable financing at BNP Paribas. The French bank has already acted as bookrunner of 12 coronabond placements.

Such bonds attract particular attention of investors who are interested in socially responsible investment and ESG (ecological social governance). Increased investment in ESG in recent years has contributed to the creation of bonds related to the coronavirus pandemic when it began, allowing markets to quickly redirect capital to tackle the health crisis, writes The Wall Street Journal, citing investors and bank representatives.

“These things don't happen overnight,” says Yo Takatsuki, head of ESG research at AXA Investment Managers.

This year, bonds to deal with the effects of the pandemic raised more money than bonds related to sustainability projects - the bond market area, which attracted significant attention amid growing interest in climate change issues. As of late May, investors have invested $ 116.8 billion in second bonds, according to BNP Paribas.

source: wsj.com