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Powering vaccine expansion in vulnerable countries
Targeting relief for embattled developing nations, J.P. Morgan leads $750 million bond financing to help equalize COVID vaccine distribution.
May 18, 2021
While the United States and other developed countries have already vaccinated nearly half of their populations, scores of countries have immunization levels in the single digits, if at all, leaving many unprotected.
To address this, the international community is working together to strengthen health systems and prepare countries so that they can have access to and deploy vaccines. COVID-19 Vaccines Global Access (COVAX) – co-led by Gavi, the Vaccine Alliance (previously the Global Alliance for Vaccines and Immunisation), the Coalition of Epidemic Preparedness Innovations (CEPI) and the World Health Organisation (WHO) – launched in the spring of 2020 to ensure equitable global access to COVID vaccines, especially in countries with the fewest resources to acquire them.
J.P. Morgan acted as lead manager on a $750mn bond issue for the International Finance Facility for Immunisation (IFFIm). IFFIm is a multilateral finance organization whose primary purpose has been to provide Gavi with accelerated access to funding by issuing bonds in capital markets against long-term pledges from sovereign donors, including the United Kingdom, Norway, France, Italy, Australia and the Netherlands.* Gavi has turned to IFFIm to do the same for the COVAX facility as it has for a range of programs such as preventing measles and polio in children lower-income countries. The World Bank is the Treasury Manager for IFFIm.
The five-year bond represents a significant step in Gavi’s efforts to equalize vaccine distribution around the world.
“IFFIm’s bond issue 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 to make a positive difference in vaccination efforts around the world through IFFIm’s Vaccine Bonds.”
“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,” IFFIm Board Chair Ken Lay said in a statement announcing the financing.
With Gavi’s two decades of experience in delivering vaccines, it has set in place a plan for prioritizing vaccine distribution to the countries based on health impact, value for money, the efficiency of its current immunization programs and need. Once qualified, the distribution is equitable among the countries. Within the countries, individuals receive the vaccine based on the accepted practice of establishing tiers based on factors such as age, underlying conditions and if they are a healthcare worker.
“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 Gavi’s CEO Seth Berkley. He added, “Proceeds from the bonds will also strengthen Gavi’s continuing support for its core vaccine programs to ensure that routine immunization does not fall behind and hard-earned gains against vaccine preventable disease are not lost.”
J.P. Morgan is among the top ranked underwriters working with the World Bank Treasury that and also manages the funding programs of the World Bank (IBRD, International Bank for Reconstruction and Development) and the International Development Association (IDA), part of the World Bank Group.
“The issue was IFFIm’s largest since its capital markets debut in 2006 and offered a unique ESG (Environmental, Social and Governance) impact angle and investment opportunity, given the issuer’s sole activity is to provide accelerated funding for vaccine development and delivery to children in the poorest countries,” Said Sarah Lovedee, in the J.P. Morgan Sovereign, Supranational and Agency (SSA) group based in London.
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