CABEI, first MDB to issue Covid-19 Vaccine Bond-US$50 million.
CABEI becomes the first Multilateral Development Bank (MDB) to issue a COVID19 Vaccine Bond as part of its additional efforts to better attend the needs of the Central American region amidst the global pandemic. The proceeds of the bond issuance will allow timely and efficient access to a COVID-19 vaccine, once available, and support the implementation of immunization initiatives to protect the health of the region’s population.
Tegucigalpa, November 11, 2020.- As the region’s MDB, CABEI is committed to aid and support Central America, especially throughout times of stress. In this regard, earlier this year, as a direct response to the COVID-19 pandemic, an Emergency Program was created to provide financial resources to countries in the region in order to finance different activities towards the prevention, detection and treatment of COVID-19.
To further extend the reach of the COVID-19 Emergency Program, CABEI included an additional component, up to US$400 million, to support countries in their efforts to access and purchase vaccines to immunize their population against COVID-19. The aforementioned component consists of a credit facility, US$50 million for each Central American country, to provide loans to both the public and private sectors, making CABEI the first MDB to structure and announce a facility of this nature.
In addition, not only has CABEI managed to become the first MDB to issue a COVID19 vaccine bond in the Asian Market, it is also the first financial institution to issue a bond with directed best efforts towards the acquisition of vaccines for the Central American population. The bond issuance was executed as a private placement, with a 5-year tenor with and a total amount of US$50 million.
As a result of bilateral conversations with the Pan-American Health Organization (PAHO), and within the context of the CABEI’s Regional Credit Facility for the acquisition of Vaccines and Immunization Campaigns, Central America will also receive support in the process of structuring the corresponding programs and operations. According to the technical assistance collaboration agreement with PAHO, the region will be able to rely on experts to assure the efficient planning of Covid-19 immunization campaigns and obtain support regarding the logistics involved in the procurement of the required medical supplies, staff training, medical waste and final disposal management systems, awareness campaigns, monitoring, cold chain management, among other critical aspects. In addition, PAHO will serve as the purchasing agent once an approved vaccine is out in market, proving further reassurance that beneficiary countries will be receiving the much-needed medical supplies.
CABEI’s Executive President, Dr. Dante Mossi, stated that “the COVID19 Vaccine Bond evidences CABEI’s commitment towards the Central American region in their efforts to contain and manage the sanitary crisis, by further reassuring their access to a vaccine”. In addition, Dr. Mossi also confirmed that CABEI will continue to support the region in every possible way amidst COVID-19 pandemic, through the various components of the institution’s COVID-19 Emergency Program for up to USD2.36bn.
Dr. Mossi added that “through the execution of this bond, CABEI effectively engaged the international capital markets to mobilize additional resources needed in the Central America region to fight the effects of the pandemic”.
Currently, CABEI’s credit ratings in an international scale are: Standard & Poor’s with a rating of AA (stable outlook), Moody’s with Aa3 (stable outlook) and Japan Credit Rating (JCR) with AA (stable outlook), reaffirming the Bank’s financial strength.