Bond for vaccine projects launched

LONDON – A pioneering bond designed to raise US$1 billion for life-saving vaccines in the world’s poorest countries will be launched soon, one of the lead managers said yesterday.

The offering is the first of its kind to tap global capital markets for funding to fight preventable diseases like measles, polio and tetanus, which kill more than two million children a year in impoverished countries. Proceeds from the bond sale will go to a new development agency, International Finance Facility for Immunisation (IFFIm), which will be administered by the World Bank.The scheme is the brainchild of British finance minister Gordon Brown, who has long campaigned for bond financing as a way of “front-loading” rich countries’ aid budgets.This week’s offering is only the first leg of the initiative, which aims to raise US$4 billion in the bond markets over the next 10 years.The programme is backed by six European countries – Britain, France, Italy, Spain, Sweden and Norway – and uses long-term development budgets of donor countries as collateral to raise funds.Brazil and South Africa have also committed to join at a later data, with more countries waiting to see the outcome of the initial transaction.Joint lead managers on the sale are Goldman Sachs and Deutsche Bank.Initial price guidance suggests the five-year bond will be priced to yield 30 to 33 basis points over the current Treasury bond of the same maturity.Nampa-ReutersProceeds from the bond sale will go to a new development agency, International Finance Facility for Immunisation (IFFIm), which will be administered by the World Bank.The scheme is the brainchild of British finance minister Gordon Brown, who has long campaigned for bond financing as a way of “front-loading” rich countries’ aid budgets.This week’s offering is only the first leg of the initiative, which aims to raise US$4 billion in the bond markets over the next 10 years.The programme is backed by six European countries – Britain, France, Italy, Spain, Sweden and Norway – and uses long-term development budgets of donor countries as collateral to raise funds.Brazil and South Africa have also committed to join at a later data, with more countries waiting to see the outcome of the initial transaction.Joint lead managers on the sale are Goldman Sachs and Deutsche Bank.Initial price guidance suggests the five-year bond will be priced to yield 30 to 33 basis points over the current Treasury bond of the same maturity.Nampa-Reuters