Bank of America sets Corona bond issuance in motion

By: Miguel A. Rodriguez

09:45, 14 September 2020

Bank of America becomes the first commercial bank to fight against the virus

Yesterday, Bank of America sold $1 billion worth of corporate bonds, being the first commercial bank to specifically finance the health industry to help it fight the pandemic. 

The bank stated that all the proceedings would go to hospitals that treat patients with Covid-19, businesses that make or supply equipment necessary against the virus, and of course, to companies that produce tests or vaccines.

Although it is the first commercial bank to do so, it is not the first to start this movement. Globally, borrowers raised $102.6 billion of debt only this year to combat the impact of the virus. Chinese companies released the Pandemic Bonds, while Paraguay and Kookmin Bank sold debt in U.S. Dollars for Coronavirus relief. 

Pfizer issued a $1.25 billion bond used for funding social and environmental attempts, part of it focusing on the pandemic. USAA Capital Corp. sold an $800 million sustainability bond. 

According to HSBC, the social and sustainability bond issuance can double this year. The supply gained 69% after the African Development Bank, and the International Finance Corporation sold some of those.

Even though it gained 4.02% during yesterday’s trading session, Bank of America's stock price is 40% lower than last year. 

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