Investors in pandemic bonds face big losses due to coronavirus

Investors are threatened with huge losses issued by the world Bank pandemic bonds since the outbreak of the coronavirus developed into a pandemic, according to CNBC.

According to the Johns Hopkins University, the number of confirmed cases of coronavirus in the world has exceeded 200 thousand.

Pandemic bonds issued by the International Bank for reconstruction and development (IBRD) of the world Bank in 2017, is designed for the disbursement of funds to countries in need of assistance to curb the pandemic.

Bonds offer investors higher interest payments in exchange for the risk of losing a certain amount or all of their money in the event of a pandemic.

with the rapid spread of the coronavirus growing fear of the economic consequences of a pandemic led to the sale of risky assets.

According to rating Agency DBRS Morningstar, investors that hold riskier of the two kinds of pandemic bonds may soon lose the entire principal amount. The price of securities can fall more than 80%.

Rates on less risky bonds pandemic probably fell less than 50%, said Marcos Alvarez, senior Vice President, DBRS Morningstar. Information about prices for these bonds are not publicly available because they were located in private three years ago.