IFFIm Returns to Market with US$ 750 Million 5-year Oversubscribed Vaccine Bonds

IFFIm Returns to Market with US$ 750 Million 5-year Oversubscribed Vaccine Bonds

14 April 2021

IFFIm today priced US$ 750 million, 5-year fixed rate Vaccine Bonds that will provide Gavi, the Vaccine Alliance with immediately available funding to support routine immunisation in lower-income countries. The issuance, which is IFFIm’s second largest ever, will also accelerate the availability of critical funding for the Gavi COVAX Advance Market Commitment.

  • The issuance, IFFIm’s largest since 2006, will raise funding for Gavi’s core immunisation programmes and the Gavi COVAX Advance Market Commitment (AMC).
  • The Vaccine Bonds are backed by pledges from 10 sovereign donors, including recent new commitments from the United Kingdom and Norway.
  • Seth Berkley, Gavi CEO: “No one in the world is safe from the threat of COVID-19 until everyone is safe.”

 

London, 14 April 2021 – The International Finance Facility for Immunisation Company (IFFIm) today priced US$ 750 million, 5-year fixed rate Vaccine Bonds that will provide Gavi, the Vaccine Alliance with immediately available funding to support routine immunisation in lower-income countries, reaching nearly half the world’s children. The issuance, which is IFFIm’s second largest ever, will also accelerate the availability of critical funding for the Gavi COVAX Advance Market Commitment (or AMC).

The COVAX AMC is already procuring COVID-19 vaccines for lower-income countries with a goal of 1.8 billion doses financed and secured by the end of 2021. The Gavi COVAX AMC is an innovative financing instrument supporting 92 low- and middle-income economies in the COVAX Facility that pools funding to purchase COVID-19 vaccines for its participating countries. Vaccine Bonds help fund the global fight against COVID-19 and are a prime funding solution for future pandemics.

Today’s US$ 750 million 5-year transaction will mature on 21 April 2026, has a re-offer price of 99.704%, and carries a semi-annual coupon of 1%. Today’s issuance follows the US$ 500 million, 3-year fixed rate Vaccine Bond launched in October 2020.  Deutsche Bank, JP Morgan and TD Securities are lead managers of the transaction. The World Bank is IFFIm’s treasury manager.

"No one in the world is safe from the threat of COVID-19 until everyone is safe, and this transaction will help us supply lower-income countries with the vaccine doses they need to roll back the pandemic in its most acute phase,” said Dr. Seth Berkley, CEO of Gavi, which co-leads the COVAX Facility. “Proceeds from the bonds will also strengthen Gavi’s continuing support for its core vaccine programmes to ensure that routine immunisation does not fall behind and hard-earned gains against vaccine-preventable disease are not lost.”

IFFIm’s capital base consists of approximately US$ 8 billion in grants and legally binding grant commitments from its ten sovereign donors. In December 2020, two of those long-standing sovereign donors made additional pledges for IFFIm to support the COVAX AMC: GBP 500 million from the United Kingdom and NOK 1 billion from Norway.

“The COVID-19 pandemic requires resources on a massive scale,” said Dag-Inge Ulstein, Norway’s Minister of International Development and Co-chair of the ACT- A Facilitation Council. “This unprecedented challenge requires more than business as usual, and we must go beyond traditional aid budgets. By frontloading funding via the bond market, such as IFFIm, governments can help translate commitments for the future into much needed cash today. Norway has used this innovative financing mechanism to ensure rapid funding for Gavi and CEPI.”

“Gavi will deploy the proceeds of this transaction to ensure that the most vulnerable in all countries can be protected in the short term, regardless of income level,” said IFFIm Board Chair Ken Lay. “Combatting the pandemic globally, these bonds are an example of how private investors, donors and global organisations work together to provide the entire world with life-saving vaccines.”

This latest bond issue comes just as Gavi is set to unveil on 15 April its investment opportunity for the Gavi COVAX AMC, which will launch efforts to raise at least US$ 2 billion in additional and essential funding.

The Gavi COVAX AMC builds on Gavi’s two decades of experience delivering life-saving vaccines to more than half of the world’s population, including in the hardest-to-reach communities. Looking ahead, Gavi’s five-year strategy, called Gavi 5.0, stresses extending the availability of vaccines, despite the severe disruptions caused by COVID-19. This next round of funding will enable Gavi to save lives and protect people’s health by increasing equitable and sustainable use of vaccines.

“This is a fantastic result for IFFIm. IFFIm’s largest issuance since its capital markets debut in 2006 comes at a critical time for efforts to tackle the global pandemic. It presents a unique opportunity for investors to directly support a social purpose through a liquid investment product,” said Jingdong Hua, Vice President and Treasurer of the World Bank, IFFIm’s Treasury Manager. “We are grateful for the continued support from investors looking to use their power as investors to make a positive difference in vaccination efforts around the world through IFFIm’s Vaccine Bonds.”

With an orderbook of over USD 1 billion with orders from a diverse group of high-quality investors, IFFIm once again attracted demand from investors who are keen to support IFFIm’s purpose and contribute to a solution to the pandemic. Geographic placement was 83% for Europe, Middle East and Africa and 10% for the Americas with the remaining 7% placed with Asian investors. Bank treasuries and corporates took 46%, asset managers, pension funds and insurance funds made up 31% and banks, central banks and official the remaining 23% of the investor distribution.

Lead Manger Quotes

“Congratulations to IFFIm on this very successful US$ 750 million 5-year Vaccine Bond. With the global pandemic still very much affecting economies globally, especially developing countries, Deutsche Bank is proud to have been part of this critical issuance to accelerate immunisation of populations. Despite a busy primary market, IFFIm stood out due to its unique profile, allowing it to extend its USD curve by adding another liquidity point for future vaccine bonds,” said Katrin Wehle, Managing Director, Sovereign Supranational and Agency (SSA) Debt Capital Markets Origination, Deutsche Bank.

“We congratulate the IFFIm and World Bank teams on a stellar return to the US Dollar market,” said Keith Price, Managing Director, Head of Frequent Borrower Group at JP Morgan. “We at JP Morgan are incredibly proud to have played a part in this transaction, which resonated with investors across the globe. IFFIm’s mission is critically important to support the health systems of the most vulnerable countries in the world.”

“Amidst the ongoing COVID-19 pandemic and vaccine distribution, this timely transaction benefited from remarkable investor focus, attracting more than US$ 1 billion of demand from global investors,” said Laura O'Connor, Managing Director, Fixed Income Origination & Syndication, TD Securities. “It is an honour to work alongside IFFIm and the World Bank team while they continue to work towards enabling the access to the latest vaccines for developing countries."

IFFIm's financing support to Gavi has accelerated Gavi’s delivery of life-saving vaccines in the world’s poorest countries. Since 2000, Gavi has immunised more than 822 million children and prevented more than 14 million deaths, helping to halve child mortality in 73 developing countries across Africa and Asia. Gavi uses economies of scale to drive down the prices of vaccines for the world's poorest countries and plays a key role in improving global health security by supporting health systems as well as funding global stockpiles for Ebola, cholera, meningitis and yellow fever vaccines.

IFFIm is widely regarded as a pioneering social bond issuer, and Vaccines Bonds have enjoyed strong demand from socially responsible investors due to the clarity and focus of Gavi’s mission.

Summary Terms of the Vaccine Bonds

Issuer

International Finance Facility for Immunisation Company (IFFIm)

Issuer rating:

AA-/Aa1/AA (Fitch/Moody’s/S&P)

Format:

RegS

Amount:

US$ 750,000,000

Pricing Date

14 April 2021

Settlement date:

21 April 2021

Maturity date:

21 April 2026

Coupon:

1% payable semi-annually

Coupon Payment Dates:

21 April and 21 October in each year, commencing on 21 October 2021, up to and including the Maturity Date.

Issue price:

99.704%

Listing:

Luxembourg Stock Exchange

Joint lead managers:

Deutsche Bank, JP Morgan and TD Securities

ISIN / Common Code:

XS2333299324


Disclaimer

These materials are not an offer for sale of securities. The securities have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act. The issuer does not intend to register any part of the offering in the United States or to conduct a public offering of securities in the United States. Any offering of securities will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the issuer and management, as well as financial statements.