Currently there is $325 million locked up in two classes of high-risk high-interest pandemic catastrophe bonds that were created by the World Bank in 2017 as part of the Pandemic Emergency Financing Facility (PEF).
Class A, $225 million, lower risk, pays out at 7% interest rate per year. Class B, $95 million, higher risk, pays out at 11% interest rate per year. Both bond classes reach maturity in July of 2020, when they will pay back their principle investment to the investors. UNLESS their triggering conditions are met:
>artemis.bm/news/coronavirus-outbreak-meets-another-pandemic-cat-bond-trigger-condition/ >archive.is/RCckC >The Class A notes require a coronavirus outbreak to result in over 2,500 deaths (already met in China alone), with at least 250 cases being confirmed on a rolling basis, as well as more than 20 deaths being seen in at least one country overseas (now met in Iran), for an initial 16.67% loss of principal to this tranche to occur. >The Class B notes are the more likely to face triggering under a qualifying outbreak event, as only more than 250 confirmed deaths are required, alongside the other factors, for a payout to be due. Investors in Class A tranches stand to lose up 16.7% of their principle if triggered, Class B tranches stand to lose 100% of their principle.
The holders of these bonds are freaking out, they can't dump them fast enough. They are trying to sell Class A for 75 cents on the dollar, with Class B, which were going for 45-55 cents last week, are now selling for 5 cents on the dollar. >artemis.bm/deal-directory/ibrd-car-111-112/ >archive.is/SO6B2 >Update, March 2nd 2020: The highest risk layer of notes is now marked down significantly, with some secondary marks on pricing sheets we’ve seen seeking bids as low as 5 cents on the dollar for the notes, a roughly 95% mark down and a significant drop from the 45 to 55 cents average bid of last week. The lower risk $225 million of Class A notes have also been marked down, with some pricing sheets marking this tranche of notes for bids as low as 75 to 80 cents, reflecting a 20% to 25% discount.
The PEF is an insurance policy, set up by the World Bank, for the World Bank. When these bonds get triggered, the World Bank essentially pays its self. >artemis.bm/news/world-bank-president-malpass-notes-pef-pandemic-bonds-could-pay-out/ >archive.is/aNxVZ >Now turning to PEF. I want to be the layman here on PEF. For those that haven’t followed this, it was set up in 2017. It was approved by the World Bank Board and basically IDA, which is the part of the World Bank, the International Development Association, was insuring itself against this kind of risk. IBRD—the part of the World Bank that operates financing facilities—will be the recipient into the PEF fund of insurance proceeds, if it’s declared. I want to be careful because we’re not the ones that declare whether the insurance is triggered.
Lucas Jackson
Kys schizo
Juan Sanders
Now here's what I think is the really concerning thing, 14.4% of Class A investment came from pension funds. 42% of the higher risk Class B came from pension funds. And who exactly does decide if these bonds are triggered? No one. It is not the WHO declaring a pandemic that triggers the payout, its the stipulations in the bonds themselves. >As a side note, the WHO— there’s been talk that the WHO has to declare a pandemic, but that’s not correct. The triggers are stated in the prospectus and so on for this type of insurance. There is also $105 million in derivative SWAPS backing up these pandemic bonds. Which to the best of my understanding are basically credit-default swaps on these bonds that will pay out to in the event that the pandemic bonds are triggered. Exactly where this money goes (investors or the WHO) I'm unclear on. There are two triggers that haven't been met yet, the outbreak must last 12 weeks or more, and a growth-rate factor calculated at the 12 week factor (specifics on this calculation unknown): >artemis.bm/news/pandemic-cat-bond-price-plummets-on-growing-coronavirus-threat/ >archive.is/CJhtW >Among these are the duration of the outbreak being 12 weeks or greater (not met, that will be March 23rd), the number of deaths in the source country (met for both tranches), number of deaths rising above 20 in at least one country overseas (met, now in two countries Iran, Italy and also South Korea), as well as a growth rate factor in terms of new cases being confirmed at the end of the 12 week duration term (unknown at this stage).
All of it reminds me of the casino scene in The Big Short, where that $325 million has been inflated to billions and billions of fictitious wealth via derivative betting and these plummeting pandemic bonds are just the first shoe to fall. Am I just retarded Yas Forums or am I retarded and on to something?
have a bump user this could be the catalyst to a world-wide crash. what do you think is the true derivatives value of the 325 mil?
Robert Reed
Very interesting post user, thanks. But you're being way melodramatic about 300 million. That's basically nothing in this context.
Andrew Morales
I bet the world bank payed someone to release the virus.
Grayson Smith
yeah but you can have cdos and synthetics betting on each other, me see movie big brains now
Camden Morris
bump fuck glowniggers
Bentley Richardson
I have no idea. But It's clear that these pandemic cat bonds were never suppose to pay out. Their triggering criteria makes no sense. They were supposedly suppose to make huge sums of money available to poor nations to tackle pandemics early before things got out of hand. >economist.com/finance-and-economics/2017/07/27/pandemic-bonds-a-new-idea
>armstrongeconomics.com/international-news/disease/half-billion-pandemic-derivatives/ >archive.is/588tf >These pandemic bonds were sold to investors as a giant gamble in the global financial casino. The World Bank sold “pandemic bonds” which were a scheme like no other. In 2017, these bonds were sold to private investors on the premise that they would lose their money if any of six deadly pandemics (Filovirus, Coronavirus, Lassa Fever, Rift Valley Fever, and/or Crimean Congo Hemorrhagic Fever) hit.
That's exactly my main concern. That $325 million is likely just the tip of the ice berg. You dip your head under the water and the enormity of it makes you shit yourself. But I have no idea how you find out the value of all the cdos and synthetics apart from literally having dinner with one of these fuckers.
Caleb Lee
Derivatives could jump this thing up far higher than $300 million.
This is why we need smartcontracts. So we have clear conditions on when the pandemic is declared.
Catastrophe Bond Prices Signal Coronavirus Nearing Pandemic Status >archive.is/9q7dn
Investors flee from controversial pandemic bonds with coronavirus set to trigger payout >archive.is/zcRyR
The most interesting pay out trigger is the rate-of-spread calculation, which I can't find specifics about anywhere. But this seems like a metric that is flawed at its core when you're dealing with something that has a 14 day incubation period, and takes up to 4-5 weeks before it kills. At best their calculations would lag reality by a month. And DESPITE all that, the investors have allready lost all confidence in these bonds. I can't imagine anyone is buying those Class B tranches even at 5 cents on the dollar. In comparison, the Ebola outbreak in Africa in 2018 saw them drop to a minimum of 40 cents on the dollar.
Owen Walker
bump
Brayden Morales
jesus h christ holy fucking shit its REAL
Camden Jackson
>Doing business with literally self proclaimed Illuminati tier shit
Chase Johnson
> Investing in catastrophe bonds that wipe all your money when catastrophe happens Europeans are retarded
Kevin Myers
i bet if someone really followed the money with these bonds they could find out the who's who of who really made the covid19 virus
Aaron Foster
> poor nations is the same red flag as "staking" and "referral bonus" It's literally an excuse in advance to take all your money. Because muh poor nations need your help, pls sir, have a heart
Nathaniel Cruz
based, thank you user.
John Robinson
Why the fuck would you even buy this shit in the first place?
Charles Roberts
>But It's clear that these pandemic cat bonds were never suppose to pay out. I don't know why you think that. These huge financial institutions have very real plans for huge catastrophes; nuclear attacks, tsunamis, plagues, that sort of thing. They regard them as reasonably plausible events in a way that regular people simply refuse to think about.
Jason Cruz
>They regard them as reasonably plausible events in a way that regular people simply refuse to think about. and they only think this way because somewhere at the turn of the century the general attitude in finance was that "everything that makes money is allowed no matter what it is" came about. its the byproduct of pure true grit ultra greed that led to the creation of these financial instruments and anyone who disagrees is either unwise or lacks the ability to discern the manifestations of greed when they see it.
Blake Morris
Yes finance is full of scum but in this case its basic pragmatism. If you're the world bank you better try to have a realistic weighting on the possibility of catastrophe.
Alexander Morales
people like to bet on lives
Juan Peterson
If these bonds were suppose to pay out to anyone for any real purpose, they would have already. The best way to stop an outbreak is before it gets to this point, but all these bullshit trigger conditions, which the bank gets to make up themselves, make the entire thing moot. Now they're are trying to panic sell before they lose their principles. All while everyone says everything is fine and that you should just wash your hands? But it looks like these bonds are going to default, and when they do, I wonder how many billions in derivatives and fictional assets on Bankster McGoldenJew's books are just going to vanish. Could it be the first domino of a cascade failure?
Kevin Brooks
325 million is nothing though. The Fed dumped that into the market today alone, if not more.
William Murphy
Hmm so end of March would be the next trigger date
Hunter King
Possibly. That one source says March 23rd, but did not say how they calculated that date, beyond stating the 12 week stipulation. Another source I found said that the timeline is calculated as 84 days (12 weeks) from the first WHO situation report.
With CDOs and derivatives being built on it that 325 million quickly becomes much larger. Any financefags here who can take give some insight for how much exposure this has?
Jonathan Kelly
simple english pls?
Parker James
theres likely already a derivatives market trading options on these world bank bonds.
Easton Young
rich people put money away on the bet that no pandemic will happen. if one does happen they lose money. it's a negligible sum for global institutions but there is some concern and speculation that bets on these bets (derivatives) will make bad shit happen.
Other than being cartoon villains smoking cigars and betting on pandemics, what's the reasoning for this to exist
Anthony Taylor
Why you giving this info to us? What benefit you get from it?
Hudson Richardson
Can you post more info on the derivatives built on top of these bonds that causes the multiplier?
Levi Thomas
The bonds were issued by WHO, so the money with which these cartoon vilains bought the bonds went to funding an emergency relief fund to support weaker countries in case of a pandemic breakout.
Sebastian Jackson
So where can I buy those bonds for a discount? Feel like gambling a small sum on this shitty flu
Jonathan Cook
Its not just that. These bonds create a debt seed of sorts that in turn allows the creation of upwards of 20x the wealth through CDOs and other debt instruments. In addition, they shift the majority of risk of the investment to the capital markets ie. Average JoeDipshit and his pension fund and private investors. Those factors coupled with the fact that these cat bonds mature in short time (3-5 years) at incredibly high interest rates, they are money making machines. Provided they don't actually get triggered. which in the case of these particular cat bonds, seems all but guaranteed.
Thomas Lopez
buy $NCov coin
Asher Bell
Nothing. I'm not an insider or anything. I'm a borderline broke grad student with a collection of engineering degrees that appear to be quickly depreciating. A few weeks ago I was browsing the /cvg/ threads when I came across these pandemic bonds. Something seemed off about them. Over the next few weeks, amongst my mounting stack of bottled water and deenz, I could not shake the itch in the back of my mind that there was something more to these bonds. That coupled with too much time on my hands, a modicum of autism and a deep hatred of kikery, I fell down the rabbit hole. What I found was not reassuring so I hoped you fags could make sense of it all.
All I see is patterns. I don't necessarily know what they mean or what they are useful for but I didn't make this shit up, they did. I trust if there is anything meaningful here you bros will keep the thread going. If its still alive when I wake up I'll be back.
What sort of maniac pension fund manager would go for Class B. What the actual fuck.
Grayson Torres
Quality thread, user. Does anyone know about of have data about one specific class of asset and the size of derivatives built on it? Obviously it always be the same, but if we can get precise numbers acros a sufficiently vast arry of assets and their corresponding derivatives, it would be a good starting point to try and assess how big of a burger we're talking about with these WHO pandemic bonds.
Ryder Russell
Isnt the whole point of insurance to protect yourself against bad happenings?
Putting together ( were posted too fast, it's derivative as "products derived from not finacial derivatives, my bad) I'm a half brainlet, so correct me if I'm wrong. does mean there's a ratio of toughly 1 to 7 between markets and associated derivatives? That would suppose these WHO bonds are tied to something like 2 billions in dervatives?
Still a small amount compared to the overall market, but big enough to make some damage depending on who's exposed
Grayson Gutierrez
trips followed by dubs unironically bullish for multi party computation (ARPA)
Nathan Morales
Anymore info on the derivatives built on top of these bonds?
