19 Jul 2019 08:11

SEB facilitates issuance of vaccination bond

SEB acted as joint lead manager together with Canada’s TD Bank in the issuance of a 600 million Norwegian kroner bond that will help accelerate vaccination programs for children in some of the world's poorest countries.

"We are immensely proud that SEB was entrusted with the role of facilitating this issuance. It will help to accelerate the development of new vaccines for some of the world's most dangerous infectious diseases and to make them available at affordable prices," says Ben Powell, deputy head of Climate & Sustainable Finance in the Large Corporate & Financial Institutions division.

The International Finance Facility for Immunization (IFFIm), an organisation founded in 2006 with a mission to increase the availability of funds to support the work of the Global Vaccination Alliance (Gavi), issued the bond. IFFIm uses long-term commitments for government donations to issue vaccination bonds that provide immediate access to the donated funds. IFFIm’s bond issuance program is managed by the World Bank Treasury.

The bond that SEB helped arrange was priced on 8 July and has a settlement date of 18 July. The Norwegian government recently committed 600 million kroner to IFFIm, thus providing the rationale for the bond issuance. The bond, which has a six year maturity, was sold to both domestic and international investors.

The bond pays zero interest over its lifetime, but instead is issued at a discount with the nominal amount amortising by 20 per cent annually from March 2021.

“This is an attractive transaction that gives investors a unique investment opportunity in Norwegian kroner, with a structure that is the most cost effective for IFFIm,” says Ben Powell.