EBRD launches health bond

By Axel  Reiserer

EBRD launches health bond

Dai-ichi Life becomes sole investor in first issuance for PLN 317 million

The EBRD has successfully placed its inaugural health bond in a further diversification of the Bank’s financial instruments.

The proceeds of today’s note issuance will be used to finance EBRD health projects such as the construction or expansion of medical centres and improvements in access to, and raising the standards of, pharmaceutical products.

The Bank has been issuing green bonds and microfinance bonds since 2010, targeting investors with a specific focus on socially responsible investments. All such issuance is aligned to the Green Bond Principles and Social Bond Principles, which the EBRD fully supports as a member of the Executive Committee and active participant in several of the related working groups.

The health bond, which is denominated in Polish zloty (PLN) for an amount of PLN 317 million was purchased by Dai-ichi Life Insurance as sole investor, reflecting the firm’s commitment to investments that contribute to creating a sustainable society. The issue bears a coupon of 3.01 per cent, matures on 13 March 2028 and  will be listed on the regulated market of the Luxembourg Stock Exchange. It will also be displayed on the Luxembourg Green Exchange (LGX), which is the first such platform exclusively dedicated to green, social and sustainable securities, and which upholds the highest levels of transparency by requiring issuers to comply with market best practices.

Isabelle Laurent, EBRD Deputy Treasurer and Head of Funding, said: “Our inaugural health bond, which is aligned with the Social Bond Principles, will support the EBRD’s key projects that seek to improve access to, and quality of, health services and pharmaceutical products in the economies where we invest. While the EBRD assesses the environmental and social impacts of all of its investments in order to achieve good international standards, our issuance of ’themed‘ bonds supports projects in which substantially all the financing is directed to the referenced environmental or social goal.”

The EBRD has a triple-A rating with stable outlook, according to the assessment of the three leading rating agencies, and in 2017 issued a total of €9.2 billion under the 2017 borrowing programme and short-term financing facility.

The new health bond was created in recognition of the importance of the health sector, including health care and pharmaceutical providers, in the Bank’s countries of operations across the three continents Europa, Asia and Africa.

For example, the EBRD supported Montenegro’s private hospital Codra in funding a new maternity ward in November 2013. The Bank also provided support under a public-private partnership model to construct a new healthcare campus in Adana, Turkey, in 2017.