May have been posted previously.
They would have lost all the profit unless we had a pandemic!
Pandemic bonds in coronavirus
times: ‘financial goofiness’ or fiscal
genius?
Bonds taking coronavirus into the equation have come into the spotlight. Many have been quick to criticize them, but if you look at the longer-term probability of pandemics they could be seen as the start of something with multiple positive uses.
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Most of us heard the term “coronavirus” for the first time earlier this year. However, the threat of a new massive contagion similar to SARS or MERS was already known to the World Health Organization (WHO) and probably some in the medical community.
Even more interestingly, it was also well known to financial markets. In June 2017, the International Bank for Reconstruction and Development (IBRD, the lending arm of the World Bank) issued some USD $320 million in CAT (pandemic) bonds, or coronavirus bonds, that would expire on July 15, 2020 and that took coronavirus into consideration. These bonds were risky financial instruments whose payoffs were contingent upon the outbreak of a global disease – coronavirus was one in a list including flu, Crimean Congo hemorrhagic fever, filovirus, Lassa fever and Rift Valley Fever.
Cont….
https://www.imd.org/research-knowledge/articles/Pandemic-bonds-in-coronavirus-times/