The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Pandemic bond trigger failure shows flaws of relying on reporting by poorest countries

The World Bank’s pandemic bond has failed to pay out to poor countries at its first opportunity, a predictable result of designing a structure dependent on the ability of those countries to report coronavirus cases.


The World Bank’s pandemic bonds, issued in 2017 and designed to help poor countries deal with the effects of a disease pandemic earlier than traditional insurance schemes such as catastrophe bonds, have failed to hit their triggers at the first opportunity since the coronavirus outbreak began.

As Euromoney has previously reported, April 9 was the earliest point at which a determination as to whether the bonds would pay out could be made. On that date the independent calculation agent, AIR Worldwide, submitted its report that the outbreak had not met the precise requirements for the bonds to suffer a reduction in principal, which would have seen money made available to developing countries if they requested it.

The maximum payout from the $425 million bond and swap package within the World Bank’s Pandemic Emergency Facility (PEF) in the case of coronavirus is just $195.8 million, with bondholder losses limited to $132.5 million.

Those sums make the facility largely irrelevant when compared with the billions being mobilized elsewhere for developing countries in response to the outbreak – including by the World Bank itself.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree