Nordic coronavirus bond snapped up

The first bond issue in Europe by a public investment bank to fund measures to cope with the coronavirus pandemic has been successfully placed, one of the organisers said Tuesday.

The Nordic Investment Bank raised one billion euros (USD 1.1 billion) on the markets for a "COVID-19 Response Bond", France's BNP Paribas bank said.

"It's a first on European markets and is part of measures taken as a result of the epidemic," said Agnes Gourc of BNP Paribas CIB's sustainable finance and investment wing.

The operation followed the model of green or responsible bonds with very strict conditions on what type of projects the funds may be used, she told AFP.

Funding will go primarily to public sector finance to meet the rise in spending linked to unemployment, loans to the financial sector to help medium-sized companies and "direct finance for the real economy", including for large companies in the health and medical equipment sector, said Gourc.

The Nordic Investment Bank is the international financial institution of the Nordic and Baltic countries with headquarters in Helsinki.

Demand for the three-year bonds, which carried a coupon with no annual interest, was over three times the issue amount.