Posted on January 16, 2009

GAVI Alliance to Sell Bonds in Japan to Fund Child Vaccinations

The Global Alliance for Vaccines and Immunization (GAVI) will sell bonds in Japan with higher-than-average yields to help fund a program that provides vaccinations to children in poor nations, Bloomberg.com reports.

Funded by a combination of philanthropic dollars, government contributions, and private investments, the program will work to purchase and distribute vaccines and help local authorities expand their healthcare systems. GAVI, which was co-founded by the Bill & Melinda Gates Foundation, hopes to raise as much as $500 million by selling the three-year uridashi bonds next month.

According to GAVI CFO Alice Albright, the coupon, or interest obligation, on the bonds will likely be in the mid-single digits, with final pricing set next week by Daiwa Securities Group, the manager of the sale, and the World Bank. For the sake of comparison, the International Finance Corporation, a lending unit of the World Bank, sold three-year uridashi bonds denominated in New Zealand dollars with a coupon of 4.3 percent in mid-December.

Denominated in New Zealand dollars, Australian dollars, and South African rand, the bonds will carry top credit ratings from Standard & Poor's, Moody's, and Fitch. The planned sale will be almost twice the size of GAVI's previous issue last March, when it raised $223 million in Japan selling uridashi bonds denominated in South African rand.

"This has not been done before," said Alan Gillespie, chairman of the International Finance Facility for Immunization, which is managing the bond sale on behalf of GAVI. "Here are the savings instruments where you can put your savings and make an investment."