Corporate Pandemic Bonds

45 Pages Posted: 19 May 2020 Last revised: 20 May 2020

See all articles by Xiang Gao

Xiang Gao

University of North Dakota

Date Written: May 1, 2020

Abstract

I examine corporate pandemic bonds, whose proceeds are committed to COVID-19 containing activities. I find an average cumulative abnormal return of 1.33–1.71% during the five trading days surrounding their issuance announcement. Also, their yield spread is 13.8–20.9 basis points lower than that of otherwise similar non-pandemic bonds. Additional evidence suggests that their issuances could facilitate COVID-19 containment. In mainland China, newly confirmed COVID-19 cases decrease by 1,217, recovered cases increase by 6,468, and the recovery rate increases by 6.9% following the issuance of a corporate pandemic bond.

Keywords: Corporate Bonds, Stock Return, Pandemic, COVID-19, Yield Spreads, Corona Virus

JEL Classification: E44, G10, G12, G13, G32, H84, I10

Suggested Citation

Gao, Xiang, Corporate Pandemic Bonds (May 1, 2020). Available at SSRN: https://ssrn.com/abstract=3603700

Xiang Gao (Contact Author)

University of North Dakota ( email )

Box 7096
Grand Forks, ND 58202
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
144
Abstract Views
700
rank
239,282
PlumX Metrics