19 July 2022

UK bond market

• Proceeds from the vaccine bonds will finance Gavi immunisation programmes including reaching “zero dose” children
• "In light of pandemic-driven setbacks in many countries Gavi supports, we are now focusing on building on past progress and reaching those children who currently receive no vaccines or other essential health services,” said Seth Berkley

London, 19 July 2022 – The International Finance Facility for Immunisation Company (IFFIm) today priced a £250 million 3-year, fixed-rate bond that will provide immediately available funding for Gavi, the Vaccine Alliance. Proceeds will help finance Gavi’s core immunisation programmes, including reaching 14 million “zero dose” children who have never received a single vaccine, and strengthening routine immunisation in low-income countries.

The bond offers an annual coupon of 2.75% and an annual yield of 2.761%. It was priced at +93 basis points over the 0.625% UK Gilt due June 2025. 

Despite the volatile market backdrop, the transaction was oversubscribed, attracting 26 investors and an order book of over £415 million. The greatest demand came from UK-based investors (92%), with the remainder from investors in other European countries, as well as in Asia and the Americas. The bonds were placed with asset managers and pension funds (54%), bank treasuries (26%), as well as central banks and official institutions (20%). 

Barclays and TD Securities are lead managers for the transaction. The World Bank is IFFIm’s Treasury Manager.

With this new bond, IFFIm has returned to the sterling bond market for the first time since May 2009. Today’s transaction has reached previous IFFIm investors as well as new investors who expressed interested in IFFIm’s “pure play” social purpose.

“IFFIm is once again the only issuer bringing the debt capital markets and sovereign donors together to accelerate delivery of safe and effective vaccines to children in poorer countries,” said Ken Lay, IFFIm Board Chair. “IFFIm’s strong investment-grade credit ratings and the liquidity of its bonds make it an exceptionally cost-effective tool for funding the essential work Gavi is doing.”

"The proceeds from today’s bonds will be put to work quickly to strengthen Gavi’s routine immunisation programmes. In light of pandemic-driven setbacks in many countries Gavi supports, we are now focusing on building on past progress and reaching those children who currently receive no vaccines or other essential health services.”
Dr Seth Berkley, CEO of Gavi, the Vaccine Alliance

“We are pleased to see continued and strong investor interest and support of IFFIm’s work in providing vaccines to those that need them most,” said Jorge Familiar, Vice President and Treasurer of the World Bank. “IFFIm bonds provide investors the opportunity to invest for purpose and impact and support vaccines that are integral to countries’ efforts to strengthen health responses and build resilience.”

IFFIm’s capital base consists of almost US$ 9.5 billion in legally binding grant commitments from its ten sovereign donors. The UK, IFFIm’s largest and founding donor, recently finalised an additional pledge to IFFIm as part of their commitment to Gavi 5.0. As of July 2022, the UK’s existing IFFIm commitments total nearly £2.6 billion to support Gavi core immunisation programmes and COVID-19 vaccines provided by the COVAX Facility. As IFFIm’s largest donor, the UK is pledging around 47.1% of the remaining donor payments.

Lead Manager Quotes:

“We congratulate IFFIm on a stellar return to the Sterling market with its first GBP-denominated vaccine bond since 2009, delivering key funding diversification in this fast-changing market.  Despite the challenging market backdrop for many other issuers, the result and strong GBP order book is testament to investor support for IFFIm’s critical mission. Barclays is immensely proud to have supported IFFIm in this transaction and to help accelerate funding for vaccine delivery in the world’s most vulnerable countries,” said Lee Cumbes, Head of Debt Capital Markets EMEA, Barclays.

"‎We congratulate IFFIm on an exceptional GBP-denominated vaccine bond offering. Despite the volatile market backdrop, investors recognised the powerful impact of IFFIm as an issuer. That support is reflected in the impressive demand collected during today's transaction. As always, it is an honour to work alongside IFFIm as their work continues to be crucial," said Laura O'Connor, Managing Director, Fixed Income Origination & Syndication, TD Securities.

Summary terms of the bond