INTERVIEW-New vaccine bonds likely delayed until 2009
By Michael Kahn
LONDON, Nov 13 (Reuters) - New vaccine bonds aimed at European retail investors will probably hit the market in the first half of 2009 instead of 2008 as originally planned because of the turmoil in world markets.
Alan Gillespie, chairman of the International Finance Facility for Immunisation, the group that will bring the offerings to the market, told Reuters he was also eyeing another sale in Japan in February as part of a plan to raise a total of $4 billion over the next four years.
"We are looking at the new borrowing in the new year," Gillespie said in an interview. "We have kept out because of market turmoil. There is just too much going on."
The upcoming bonds, whose proceeds will be used to vaccinate children in poor countries, will target retail investors and could be denominated in euros, sterling or dollars. A previous offering to Japanese investors was in South African rand but it is not clear yet what currency the next financing there will take.
So far the group has raised more than $1 billion from capital markets to immunise poor children against preventable diseases such as measles, meningitis, hepatitis, yellow fever, tetanus and polio.
The "AAA"-rated bonds are backed by some $5 billion in pledges from Britain, France, Spain, Italy, Norway, Sweden and South Africa that will flow in over a 20-year period.
"The original target was to get toward $7 billion," Gillespie said. "We will continue to work towards it but the reality is every government's expenditures are being examined right now, but I think we will see other countries join in."
Proceeds from the bonds support the GAVI Alliance, a Geneva-based body working to improve access to vaccines. Set up with an initial investment from the Bill & Melinda Gates Foundation, the group has so far provided vaccines for 213 million children in 72 countries.
The group launched its inaugural bond in 2006 with a $1 billion offering for institutional investors like pension funds and non-profits. It also successfully sold the equivalent of $223 million in debt earlier this year to the Japanese retail market.
One problem now emerging is how to market such an offering as governments worldwide backstop investments in a deepening financial crisis.
But Gillespie believes a gilt-edged rating and the fact the proceeds go toward improving children's health will make a difference in attracting institutional and retail investors looking for a safe, socially responsible return.
"There has been a startling flight to quality and we now represent that quality," he said. "We think we can access the market in a very differentiated way because of what we do." (Reporting by Michael Kahn; Editing by John Stonestreet)
LONDON, Nov 13 (Reuters) - New vaccine bonds aimed at European retail investors will probably hit the market in the first half of 2009 instead of 2008 as originally planned because of the turmoil in world markets.
Alan Gillespie, chairman of the International Finance Facility for Immunisation, the group that will bring the offerings to the market, told Reuters he was also eyeing another sale in Japan in February as part of a plan to raise a total of $4 billion over the next four years.
"We are looking at the new borrowing in the new year," Gillespie said in an interview. "We have kept out because of market turmoil. There is just too much going on."
The upcoming bonds, whose proceeds will be used to vaccinate children in poor countries, will target retail investors and could be denominated in euros, sterling or dollars. A previous offering to Japanese investors was in South African rand but it is not clear yet what currency the next financing there will take.
So far the group has raised more than $1 billion from capital markets to immunise poor children against preventable diseases such as measles, meningitis, hepatitis, yellow fever, tetanus and polio.
The "AAA"-rated bonds are backed by some $5 billion in pledges from Britain, France, Spain, Italy, Norway, Sweden and South Africa that will flow in over a 20-year period.
"The original target was to get toward $7 billion," Gillespie said. "We will continue to work towards it but the reality is every government's expenditures are being examined right now, but I think we will see other countries join in."
Proceeds from the bonds support the GAVI Alliance, a Geneva-based body working to improve access to vaccines. Set up with an initial investment from the Bill & Melinda Gates Foundation, the group has so far provided vaccines for 213 million children in 72 countries.
The group launched its inaugural bond in 2006 with a $1 billion offering for institutional investors like pension funds and non-profits. It also successfully sold the equivalent of $223 million in debt earlier this year to the Japanese retail market.
One problem now emerging is how to market such an offering as governments worldwide backstop investments in a deepening financial crisis.
But Gillespie believes a gilt-edged rating and the fact the proceeds go toward improving children's health will make a difference in attracting institutional and retail investors looking for a safe, socially responsible return.
"There has been a startling flight to quality and we now represent that quality," he said. "We think we can access the market in a very differentiated way because of what we do." (Reporting by Michael Kahn; Editing by John Stonestreet)
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