AVN 66.93 Decreased By ▼ -0.17 (-0.25%)
BAFL 29.54 Decreased By ▼ -0.21 (-0.71%)
BOP 4.06 Decreased By ▼ -0.01 (-0.25%)
CNERGY 3.62 Decreased By ▼ -0.11 (-2.95%)
DFML 11.94 Decreased By ▼ -0.31 (-2.53%)
DGKC 43.26 Decreased By ▼ -2.10 (-4.63%)
EPCL 45.97 Decreased By ▼ -1.03 (-2.19%)
FCCL 11.81 Decreased By ▼ -0.19 (-1.58%)
FFL 5.91 Decreased By ▼ -0.04 (-0.67%)
FLYNG 6.04 Decreased By ▼ -0.14 (-2.27%)
GGL 11.41 Decreased By ▼ -0.48 (-4.04%)
HUBC 68.11 Decreased By ▼ -0.39 (-0.57%)
HUMNL 5.64 Decreased By ▼ -0.08 (-1.4%)
KAPCO 24.91 Decreased By ▼ -0.34 (-1.35%)
KEL 2.13 Decreased By ▼ -0.01 (-0.47%)
LOTCHEM 24.95 Decreased By ▼ -0.41 (-1.62%)
MLCF 24.91 Decreased By ▼ -0.79 (-3.07%)
NETSOL 75.92 Decreased By ▼ -1.88 (-2.42%)
OGDC 85.99 Decreased By ▼ -2.13 (-2.42%)
PAEL 11.11 Decreased By ▼ -0.54 (-4.64%)
PIBTL 3.99 Decreased By ▼ -0.13 (-3.16%)
PPL 66.27 Decreased By ▼ -2.44 (-3.55%)
PRL 12.92 Decreased By ▼ -0.33 (-2.49%)
SILK 0.87 Decreased By ▼ -0.01 (-1.14%)
SNGP 40.72 Decreased By ▼ -0.98 (-2.35%)
TELE 7.57 Decreased By ▼ -0.40 (-5.02%)
TPLP 15.05 Decreased By ▼ -0.37 (-2.4%)
TRG 110.33 Decreased By ▼ -2.23 (-1.98%)
UNITY 13.52 Decreased By ▼ -0.58 (-4.11%)
WTL 1.21 Decreased By ▼ -0.02 (-1.63%)
BR100 4,081 Decreased By -61.9 (-1.49%)
BR30 14,631 Decreased By -307.2 (-2.06%)
KSE100 40,376 Decreased By -501.9 (-1.23%)
KSE30 14,916 Decreased By -172.3 (-1.14%)
Follow us

Socially conscious bond investors will be targeted in a coming wave of vaccine bond deals that will seek to provide billions of dollars for the speedy rollout of COVID-19 shots for developing countries.

Dedicated vaccine bonds have been deployed before, but the immediate COVID-19 funding needs should lead to large amounts of new issuance in 2021.

"There is no doubt that investors value the Social label on public sector debt issuance and vaccination is the ultimate social project," said Philip Brown, Citi's head of sustainable debt capital markets, who helped to sell a vaccine bond in October.

"This is going to be an important theme in 2021...We need a bigger effort now, which involves huge sums of money up front."

The total cost of immunising the developing world is difficult to gauge, but is expected to be in the tens of billions of dollars.

The GAVI vaccine alliance said last week a joint facility with the World Health Organisation to buy and distribute COVID-19 shots in 92 poor countries needed nearly $5 billion next year to deliver 1.3 billion doses. That sum, on top of $2.1 billion already secured, may prove an underestimate if the per-dose cost proves higher than forecast.

Cyrus Ardalan, Board Chair of The International Finance Facility for Immunisation (IFFIm), which raises funding for GAVI, estimated that between a quarter and half of GAVI's COVID-19 funding needs would be met through IFFIm bonds.

He told Reuters he was "very confident" of at least one or two new bond launches in 2021.

"The key is in my mind to see how well GAVI is able to mobilise resources and secure vaccines so that we have an equitable distribution across countries globally," he said. "Emerging market countries are extremely vulnerable."

Double-A rated IFFIm is designed to roll forward future donor pledges into cash-in-hand for vaccination programmes today. It raised $500 million in October through its first vaccine benchmark bond in three years in a more than three times oversubscribed deal.

Geneva-based GAVI, which has secured hundreds of millions of doses of AstraZeneca's candidate vaccine, aims to pay for at least the first one billion doses of approved vaccines and is targeting 20% population coverage in poor countries.

The sums needed are huge.

International organisations estimated that vaccinating a fifth of Latin America and the Caribbean could cost more than $2 billion while rolling this out to priority populations in Africa would come to nearly $6 billion.

"We don't know what it is going to cost - the reason is that we don't know what the full complement of vaccines are, what the yield of those vaccines are at scale, whether they are going to be two dose vaccines, one dose vaccines, etc.," GAVI CEO, Seth Berkley, told reporters last week.


Not just GAVI is turning to bond markets.

The African Development Bank (AfDB), the World Bank's International Finance Corporation and sovereigns such as Indonesia and Peru have all issued bonds in 2020 with proceeds tied to tackling COVID-19 and mitigating the economic downturn, although not specifically to pay for vaccines.

Social bond issuance has soared in 2020, thanks to growing interest in ethical investment and more governments and agencies wanting to use them to fund socially beneficial projects. Such bond sales hit $163.7 billion year-to-date, almost twelve times 2019 levels, based on Refinitiv data.

"We expect a large amount of social bond issuance in 2021. We expect the market to become more organised and it's going to become increasingly investor-led," said Credit Agricole's head of sustainable banking, Tanguy Claquin, who worked on IFFIm's October bond.

Given the cost of vaccinating the 3.5 billion people living in low and lower-middle income countries, bankers familiar with the sector said development banks such as the AfDB could start raising bond finance linked to vaccination rollouts.

Citi's Brown said launching entirely new funding institutions would take too much time. "It makes sense to use market structures that are already in place."-Reuters


Comments are closed.

Vaccine bond sales to soar to fund COVID-19 shots for poor countries

Government should make Toshakhana records from 1990 to 2001 public: LHC

At least nine dead, 44 injured in KPK after strong earthquake

Rupee strengthens against US dollar, settles at 283.20

‘Pakistan is running out of time,’ warns PBC as IMF programme hangs in balance

KSE-100 falls over 500 points owing to IMF programme uncertainty

Only 50% of deemed income tax be paid at the moment: SC grants interim order

Energy transmission lines to be set up in Thar by April 30: PM Shehbaz

Electricity generation dips 4% in February as economic slowdown continues

Import restrictions: Bannu Woollen Mills shuts production for 6 weeks

US Fed mulls more rate hikes amid banking uncertainty