Corporates rush to issue coronavirus bonds

Author: Karry Lai | Published: 2 Mar 2020

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To encourage funds to finance expenditure resulting from the Covid-19 outbreak, China has given the green light for companies to raise money through anti-epidemic bonds. While the quick approval process will help with fundraising efforts to contain the virus, some asset managers have reservations about whether or not the funds will be used for Covid-19 emergency efforts, given that there is little scrutiny and approvals are being done in just a few days.

China’s largest banks were some of the first to launch these bonds. The Agricultural Development Bank of China issued bonds worth $715 million both to combat the coronavirus outbreak and alleviate poverty. The bonds have a two-year maturity and a fixed interest rate of 2.2951%. China Development Bank also issued bonds worth $1.93 billion with a fixed interest rate of 1.65% through the domestic interbank bond...