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SEB joins Canada's TD Bank to issue NOK vaccination bond

According to SEB, the issuance will help to accelerate the development of new vaccines for some of the world's most dangerous infectious diseases.

Photo: AJ Vaccines

SEB acted as joint lead manager alongside Canada’s Toronto-Dominion Bank (TD Bank) in the issuance of a EUR 62m bond that will help accelerate vaccination programs for children in some of the world's poorest countries.

The issuance 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 SEB Deputy Head of Climate & Sustainable Finance Ben Powell in a press statement.

“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,” Powell adds.

While the bond issued by the International Finance Facility for Immunization (IFFIm) pays zero interest over its lifetime, it is instead issued at a discount with the nominal amount amortizing by 20 percent annually from March 2021. The issuance is IFFIm’s first bond in Norwegian krone. Purchasers of the vaccine bond include Japan’s Dai-ichi Life, Norway's Kommunalbanken (KBN) and Norwegian pension fund MP.

IFFIm uses long-term commitments for government donations to issue vaccination bonds that provide immediate access to the donated funds. Its bond issuance program is managed by the World Bank Treasury.

The Norwegian government recently committed NOK 600m to IFFIm, thus providing the rationale for the bond issuance, SEB states. The bond, which has a six-year maturity, was sold to both domestic and international investors.

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