Japanese retail investors have fully taken up a pioneering $223m bond to fund vaccination programmes in the developing world, paving the way for further such offers in other markets in the future.

Individuals paying as little as $1,270 each bought all of a small second issue from the International Finance Facility for Immunisation (IFFim), which was denominated in South African rand and sold in Tokyo.

The bonds “front-load” future governments’ aid donations pledged for life-saving vaccinations through the Global Alliance on Vaccines and Immunisation, providing investors’ money to save lives now, which will be reimbursed by the sovereign donors making the aid contributions over the coming years.

The first IFFim bond, which raised $1bn from institutions in London in 2006 and was underwritten by countries including the UK, France, Italy and Spain, has already been almost entirely spent.

The new bond successfully tapped retail investors for the first time, via the Japanese uridashi market, in what could be a prelude to raising money from individuals in other markets less familiar with direct purchases of bonds.

The IFFim has spurred popular support as people seek ways to help with development issues, although their returns are underwritten by taxpayers via governments with top credit ratings.

There was additional symbolism in the fact that the latest bond was denominated in rand, given that South Africa has also pledged support to IFFim – although the decision was purely a financial one, given the current attractive terms for raising money in Japan and the appetite there for certain foreign currencies.

The proceeds are converted immediately into dollars, the dominant currency in which vaccines are purchased.

Get alerts on Asia when a new story is published

Copyright The Financial Times Limited 2022. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Comments have not been enabled for this article.

Follow the topics in this article