Remember Field McConnell and David Hawkins talking about cat (catastrophe) bonds when they appeared regularly on Rayelan's radio show? These pandemic bonds fall in that same investment class. Heads, we (the investment banking community) win, tails you lose.
-NW

Pandemic bonds were supposed to fund the cost of fighting the coronavirus — so why aren't they paying off?
Pete Evans | CBC News
Feb 22, 2020
https://www.cbc.ca/news/business/pandemic-bonds-1.5469646

[snip]

A fund known set up by the World Bank three years ago to help fight infectious diseases has done more to rack up fees for bankers and investors than it has to help doctors battle outbreaks, which is why some critics call it an expensive waste of money.

The idea was simple: The fund would raise hundreds of millions of dollars from investors willing to contribute to a pool of money that developing countries could tap into as needed to help fight the next pandemic.

Outbreaks in rich countries aren't covered. The bond's payout was targeted toward the 76 poorest countries in the world.

The benefit to global health seems obvious, but investors got a nice return out of the deal, too. Launched in the summer of 2017 and set to expire in July of this year, one tranche of the fund would pay out an annual interest of 6.9 per cent above the LIBOR rate, a benchmark interest rate set in the financial capital of London.

The other tranche was even more generous — 11.5 per cent above LIBOR every year for three years. At the current LIBOR rate, that means investors get a payout of more than eight and 13 per cent, respectively, if they own each tranche.

But there's a catch, of course. Investors get those interest payments annually, but if a pandemic breaks out and countries need the cash to fight disease, investors lose the principal they put in.