
Bank of America Just Issued a Ground-Breaking $1 Billion Corporate Social Bond to Help Fund the Fight Against COVID-19

American multinational investment bank Bank of America recently issued a corporate social bond worth $1 billion to help support the fight against the COVID-19 pandemic. The bond issuance, which was announced in May, is the first offering of its kind from a U.S. commercial bank.
The offering made by the Charlotte, North Carolina-based lender, is a 4-year bond that is callable in 3 years. It involves a fixed semi-annual interest rate of 1.486% for the first three years. The interest will then shift to a quarterly floating rate after the said period.

Tero Vesalainen/Shutterstock | Bank of America recently issued a $1 billion social bond to help in the fight against the COVID-19 pandemic.
This is the 7th bond issued by the Bank of America that falls under the environmental, social, and governance (ESG) theme since 2013. In the past, the lender has issued 5 “green” bonds, which were focused on providing clean energy. They have also issued a “social” bond intended to support community development financial institutions (CDFIs) and affordable housing.
For this recent bond issuance, the proceeds will be allocated to fund the health care industry through the firm’s Global Commercial Bank. This includes eligible social investments of not-for-profit hospitals, health care equipment and supplies manufacturers, and skilled nursing facilities.
Bank of America’s Vice Chairman, Anne Finucane, has said in a statement that the firm is committed to doing its part through providing support for businesses and professionals that are on the front lines of this fight against the pandemic.
She said that the proceeds would help companies involved in the prevention, testing, diagnosis, and treatment of the viral disease acquire critical resources. Finucane also said that this would provide an opportunity for investors to join in the effort.

sfam_photo/Shutterstock | The proceeds of the bond issuance will be allocated to the health care industry.
Bond Issuances Are Expected to Double
Borrowers around the globe have raised a record amount of debt worth $102.6 billion in 2020 to fight the impact of the coronavirus. According to data from Bloomberg, Chinese companies have recorded the most “pandemic bond” issues. Last month, Paraguay and South Korea’s Kookmin Bank sold debt in U.S. dollars to be used for COVID-19 relief.
American corporations are also catching up. Pharmaceutical giant Pfizer Inc. has issued a sustainability bond worth $1.25 billion to fund endeavors related to social and environmental impact. Meanwhile, USAA Capital Corp.’s sustainability bond, which will be used to fund projects that may include COVID-19 relief, was sold for $800 million.

Watchara Ritjan/Shutterstock | Global businesses have issued social and sustainability bonds to fund projects that may help in COVID-19 relief efforts.
It’s expected that the social and sustainability bond issuance will double to a new record this year. According to HSBC, issuers are taking advantage of the receptive capital markets to respond to the global crisis. HSBC also revealed that there was a 69% jump in supply for the first quarter compared to the same period in 2019. Banks are expected to become more active in issuing social bonds with the incentives to lend to small and medium-sized companies and the capital relief that they are getting from regulators in Europe.
More in Global
-
`
A Brief Guide to Building an Emergency Fund
Life is full of uncertainties. You never know what the next second of your life brings to you. That is why...
May 3, 2022 -
`
4 Tips to Enhance Your Investing Journey
If you were to describe the stock market in one word, how would you do it? Most people would either call...
April 28, 2022 -
`
Easy Tips Save More Money On Energy
At its core, energy conservation is the practice of using less energy in order to lower costs and reduce environmental impact....
April 27, 2022 -
`
4 Investing Tips for Beginners
Buying stocks and investing in shares can seem risky if you don’t know what you are doing and how you should...
April 25, 2022 -
`
Looking to be “Good” With Managing Money? Follow These 3 Tips
If one says he is good with money, it may imply a couple of things. It may refer to a decent...
April 22, 2022 -
`
How to Save & Grow Money When Inflation Soars? Tips & Shortcuts
Consumer pricing has been soaring lately, and it has made the cost of living really challenging. In the United States, the...
April 21, 2022 -
`
Tips For Retirement Planning
You have worked hard and built a life for yourself and your family and one full of dreams, achievements, and happiness....
April 21, 2022 -
`
What Brings Investment Makeover?
The key to successful investing is to keep your investment strategies periodically up to date with a few finance changes along...
April 21, 2022 -
`
How to Earn More At Your Current (Or Next) Job? 4 Effective Tips
How to Earn More At Your Current (Or Next) Job? 4 Effective Tips Earning a decent income is a dream of...
April 20, 2022
You must be logged in to post a comment Login