Securitization: A steadier stream of health initiatives

The International Finance Facility for Immunization (IFFIm) is a rare example of the capital markets being used in a direct attempt to ameliorate health conditions. Its proponents suggest the IFFIm will dramatically boost money provided to meet the much-vaunted Millennium Development Goals.

Officially unveiled in mid September, the initiative finances a programme of large-scale immunization against disease in developing countries. It uses a securitization vehicle, IFFIm, which is backed by part of its expected future income stream – mainly a series of future conditional annual donations by various governments.

This scheme will front-load aid to the Global Alliance for Vaccines and Immunization (Gavi) by leveraging long-term donor commitments. Principal and interest payments on the bonds will be repaid by future donor payment streams.

It will go...