 Bloomberg -- Bank of America Corp. was the first on Wall Street to issue a pandemic bond. It hopes to set a trend.The bank priced a 1 billion bond offering May 14 to fund projects addressing social issues related to Covid-19, the first sale from a U.S. financial institution that explicitly links all proceeds to tackling the virus. Response from investors has been enthusiastic, said Karen Fang, the banks global head of sustainable finance.ESG is not just a bull market luxury, Fang said in an interview, citing the banks own research. ESG is a bear market necessity.Corporations, governments, multilateral organizations and development banks have raised a record 108.4 billion of debt this year to alleviate the impacts of the deadly virus, according to data compiled by Bloomberg. Chinese companies have sold most of the so-called pandemic bonds, raising about 48.3 billion.Bank of Americas bond came about in March as the virus spread through the U.S. and much of the country began to shut down. Senior executives, including Vice Chairman Anne Finucane and Chief Operating Officer Tom Montag, were involved in internal discussions on the bond, which took weeks to construct.The pricing for the fixed-to-floating rate notes earmarked for lending to the health care industry was aggressive. The deal priced tighter than the lenders regular benchmarks, Fang said, and the bonds will yield 1.30 percentage points above Treasuries.Strong PipelineBank of America has raised more than 8 billion through environmentally and socially themed bonds and has a very strong pipeline, Fang said. Other virus-related debt includes Pfizer Inc.s 1.25 billion sustainability bond and USAA Capital Corp.s 800 million offering to fund projects that may include Covid-19 relief.While the deal makes sense for a lender like Bank of America with a large presence in green and social bond markets, it might not open the floodgates for similar transactions, according to CreditSights analysts.Were a little doubtful were going to see an imminent increase in ESG-type offerings from the banks, CreditSights chief of ESG and sustainability Josh Olazabal and the head of U.S. financials Jesse Rosenthal, wrote in an email. It will really come down to the issuers internal goals around ESG products and investors.Still, ESG-focused investors like Nuveen and Eaton Vance Management anticipate that more commercial banks will follow suit. Other lenders that have the focus and expertise to originate such loans will seek to replicate Bank of Americas deal, according to Vishal Khanduja, head of investment-grade portfolio management at Eaton Vance.We expect other sponsors to continue to innovate the structure and provide investable impact opportunities at scale, Khanduja said Tuesday in an interview.Nuveen, which oversees about 1 trillion in assets, has already had discussions with underwriters from two banks because there is interest in similar deals, according to Stephen Liberatore, head of the responsible fixed-income strategy team.This was the leader, Liberatore said of Bank of Americas bond. Now that others are seeing whats expected and how it can be done, theres a template for other banks.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.2020 Bloomberg L.P. 