IFFIm issues US$ 500 million in 3-year floating rate Vaccine Bonds

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Funding to increase immunisation of children in the poorest countries

London, 26 October 2016 – The International Finance Facility for Immunisation Company (IFFIm) today priced a US dollar floating rate benchmark bond issuance. The US$ 500 million, 3-year Vaccine Bonds provide investors an opportunity to fund immunisation programmes by Gavi, the Vaccine Alliance (Gavi), helping protect millions of children in the world's poorest countries against preventable diseases.

This marks IFFIm’s first visit to the international US dollar benchmark market since 2013, and is IFFIm’s third transaction in the public dollar markets in addition to its two successful US dollar denominated sukuk transactions.  The issuance was lead managed by Citi, Deutsche Bank and J.P. Morgan. The issue maturing on 01 November 2019 has a re-offer of 100% and carries a quarterly coupon of +26 basis points over the 3-month USD Libor rate.

“IFFIm Vaccine Bonds continue to attract investors worldwide who want to “do good and do well,” says IFFIm Chair René Karsenti. “IFFIm is very pleased to re-enter the FRN market with this socially responsible transaction which helps to fund life-saving immunisation programmes for Gavi, the Vaccine Alliance.”

“For the last 10 years, IFFIm’s vaccine bonds have become a leading model showing how capital markets can help make essential progress in global development,” said Dr. Seth Berkley, CEO of Gavi, the Vaccine Alliance. “These bonds are literally saving millions of children’s lives while giving Gavi the flexibility to deliver vaccines and other interventions when and where they are most needed.”

“The World Bank is delighted to bring this US$ FRN benchmark by IFFIm to the market.  It is an outstanding opportunity for investors to have a positive social impact through the life-saving vaccine programs that IFFIm supports,” said Arunma Oteh, Vice President and Treasurer of the World Bank, IFFIm’s Treasury Manager.  “We are grateful for the strong support from investors and financial partners alike who value the diversification benefit of IFFIm as a highly rated name and appreciate its purpose.”

Behind the impressive outcome was a bespoke execution strategy tailored to IFFIm’s specific requirements. Following a global investor call and net roadshow, IFFIm started taking indications of interest (IOIs) on Tuesday, 25th October in the Europe morning with initial price thoughts of MS+30 bps area. Encouraged by the rapid growth in the IOI book, price thoughts were revised the same afternoon to MS+28 bps area. Books were officially opened in the London morning on Wednesday with spread set at MS+26 bps, supported by an IOI book in excess of USD 400mn. The final books closed at 1pm London / 8am NY time with orders of over USD 525mn.  

The bonds were oversubscribed and successfully placed with investors around the world. The well-diversified distribution was as follows: 65% of the bonds were sold to investors based in Europe, 24% in the Middle East and Africa, 10% in the US, and 1% in Asia. Central banks / official institutions took 53%, banks and private banks 44%, and asset managers 3%, of the transaction.

Quotes from Lead Managers:  

“It’s a privilege for Citi to be a joint-bookrunner on this successful and rare USD FRN for the International Finance Facility for Immunisation (IFFIm). IFFIm bonds provide the perfect platform for the capital markets to support immunisation and reduce the incidence of disease across the developing countries.   IFFIm issuance is perfectly attuned to the substantial rise we’re seeing in investor interest in socially responsible investing,” said Philip Brown, MD, Head of Public Sector Origination, Citi  

“We congratulate IFFIm on an outstanding result. Attracting an oversubscribed, diverse and superior quality book at fine pricing is an impressive feat for such a rare issuer. This success is an affirmation of IFFIm’s model of harnessing capital market resources strategically to finance the tangible social benefits of Gavi’s work. Notably we saw some very rare investors participate in the transaction. Deutsche Bank’s association with IFFIm goes back to their inaugural USD benchmark in 2006 and we are honoured to have partnered with IFFIm and the World Bank on all of IFFIm’s international USD offerings since then,” said Steven Jallport, Head of SSA Origination at Deutsche Bank.  

“Despite being an infrequent issuer in the benchmark markets, IFFIm’s return to the USD FRN market has been a resounding success.  The upsizing of the transaction from an expected $300mn to US$500 million and the high quality orderbook demonstrates the strength of investor appreciation of IFFIm’s mission. It is particularly impressive to see so many investors participating in the transaction, with both traditional investors in the supranational product as well as those with an affinity to IFFIm’s mission involved,” Said John Lee-Tin, Managing Director, Head of SSA DCM at J.P. Morgan 

IFFIm raises funds in the international capital markets to accelerate the availability of funds for immunisation programmes and health system strengthening by Gavi, the Vaccine Alliance. IFFIm’s financial base consists of legally binding grant payments (approximately US$ 6.3 billion) from its nine sovereign donors. The World Bank is IFFIm’s Treasury Manager.

From its inception in 2006 up until today’s announcement, IFFIm had already raised more than US$ 5.2 billion equivalent in the capital markets to support Gavi, whose mission is to save children’s lives and protect people’s health by increasing access to immunisation in poor countries.

Summary Terms of the Vaccine Bonds

Issuer

International Finance Facility for Immunisation Company (IFFIm)

 

Issuer rating:

Aa1 / AA / AA

 

Format:

RegS

 

Amount:

US$ 500 million

 

Pricing Date

26 October 2016

Settlement date:

02 November 2016

 

Maturity date:

01 November 2019

 

Coupon / Re-offer Spread:

3-month USD LIBOR +26 bps

Coupon Payment Dates

Quarterly

 

Issue price:

100%

 

Listing:

Luxembourg Stock Exchange

 

Joint lead managers:

Citi, Deutsche Bank, J.P. Morgan

 

Co-lead managers:

Daiwa, SEB, TD

 

ISIN:

XS1405767358

 

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.

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