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COVID-19: How a new breed of bonds can help finance the fight

The battle against the COVID-19 pandemic will incur a huge cost to the global economy. We anticipate healthcare systems, governments, financial institutions and companies will need hundreds of billions dollars to cope with and recover from the crisis. According to the International Monetary Fund: “the cumulative loss to global GDP over 2020 and 2021 from the pandemic crisis could be around $9tn, greater than the economies of Japan and Germany, combined.”

  • Institutional investors have an important role in the recovery by ensuring availability of and access to financing through capital markets. The challenge in this fast-moving crisis is to ensure that capital can flow where and when it is most needed.
  • One response to this challenge has been the emergence of COVID-19 bonds. We see the nascent COVID-19 bonds market as a new area for impactful debt issuance, with similarities to green and social bonds. We believe these bonds can help to address the current and future societal challenges of the pandemic.
  • AXA IM have already invested approximately €230m2 in COVID-19 bonds to support the fight against the pandemic. We have developed an investment framework which expects transparency from issuers around how proceeds will be used to support their response to the pandemic. We also call for a commitment to outcome and impact measurement. In our view, these bonds could also act to boost the growth of social and sustainability bond issuances.

Press contacts

Ellis Ford
Ellis.Ford@axa-im.com | +44 20 7003 1225

Jamie Wynn-Williams
Jamie.Wynn-Williams@axa-im.com | +44 20 7003 2680

Hélène Caillet 
Helene.Caillet@axa-im.com | +33 1 44 45 88 06

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    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.
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