Coronavirus Round-up: Nordic Investment Bank to issue Covid-19 response bonds

The latest news on the Covid-19 outbreak and investment

The Nordic Investment Bank (NIB) is to issue bonds aimed at alleviating the social and economic consequences of Coronavirus in the bank’s Nordic-Baltic member countries. NIB Response Bonds will finance loans to projects intended to alleviate the social and economic impacts of the pandemic in the bank's member states, and eventually support their recovery process. Eligible loans will mainly promote the efficient operation of healthcare systems as well as financial support and labour market solutions to alleviate the social consequences and frictions the pandemic generates in supply chains. The bank published the framework for issuance of the bonds yesterday, outlining the underlying rationale and methodology for loan selection, and the governance of bond issuance, proceeds management and reporting.

The UN Global Compact is starting a series of webinars exploring approaches to leadership during the COVID-19 crisis, featuring speakers from the UN, government and business. The first session will feature UN Deputy Secretary-General Amina J Mohammed and UN Global Compact CEO and Executive Director Lise Kingo. Register here.

Caisse de dépôt et placement du Québec (CDPQ) is creating a C$4bn “envelope” to support Québec companies affected by Coronavirus – one of a package of measures announced by the Canadian pension fund to temper the impacts of the pandemic. The money will be invested in companies that meet certain criteria, including having been profitable before the COVID-19 crisis and having a promising growth outlook. Recipient firms do not have to be part of CDPQ’s portfolio. CDPQ also said it was freezing the salaries of leaders in the Canadian pension fund and its subsidiaries for 2020 and postponing payment of variable compensation for leaders and senior executives – a move they said demonstrated “their full solidarity with what our depositors are experiencing in these extraordinary times”.

BlackRock’s Vice-Chairman Philipp Hildebrand has called COVID-19 and the coming global recession a “Grey Rhino” event, citing risk expert Michele Wucker’s term for a “highly obvious, highly probable, but still neglected danger”. The comments came as part of Hildebrand’s keynote speech at JP Morgan’s fifth Global ESG Conference, which took place online last week. “It’s a risk that most of us simply have not paid enough attention to,” Hildebrand said. He said climate change is another “Grey Rhino”, highlighting its “well-established and growing” links with global diseases. “Rising global temperature extends the reach of vector-borne illnesses, and localized air pollution and environmental degradation increase health risks for local populations,” he said.

UN trade and development body UNCTAD has made an “urgent call” for a $2.5trn Coronavirus aid package for developing countries, saying the economic fallout from COVID-19 is likely to get “much worse” before it gets better for six billion people living in emerging economies. The organisation said the crisis package should consist of $1trn made available through expanded use of special drawing rights, $1trn in debt cancellation for developing countries, and $500bn to invest in emergency health services and social relief programmes under a “Marshall Plan for Health Recovery”. The appeal was made after a new report from the body found that, in the two months since the virus began spreading beyond China, developing countries have taken an “enormous hit”, and face a further $2trn-$3trn drop in investment from overseas in the next two years.