IFC raises US$1b to support economic recovery in developing countries

GLOBAL –IFC, the largest global development institution focused on the private sector in emerging markets, has raised US$1 billion to assist businesses in developing countries recover from the COVID-19 health and economic crisis.

IFC said that the funds were raised through a 10-year US dollar global benchmark bond that the it issued in August this year.

IFC further noted that the 10-year benchmark pays a semi-annual coupon of 0.750%, priced with a spread of +18 basis points to mid-swaps.

Final books for the benchmark stood in excess of $1.2 billion, excluding joint-lead manager interest, with a solid demand from high quality accounts.

This transaction which has Citi, HSBC, J.P Morgan and Nomura as the joint fund nagers, marks IFC’s first 10-year US dollar global benchmark since 2016.

IFC noted that the transaction highlights the continued support it has from the investor community.

This is the third time that IFC has accessed US dollar primary markets with a global benchmark trade this calendar year.

In March, IFC issued a $1 billion three-year social bond, and in July, IFC issued a $2 billion five-year global bond.

“As the world continues to reel from the tragedy of the COVID-19 crisis, IFC is dedicated to supporting the private sector in emerging economies as they deal with the effects of the pandemic,” said IFC Vice President and Treasurer John Gandolfo.

“This issuance, which drew interest from over 40 investors around the globe, will support our work with clients and partners during these challenging times.”

Data from IFC reveals that central banks and other official institutions accounted for 41 percent of the orders, followed by asset managers and pension/insurance funds at 34 percent and banks at 24 percent.

About 50 percent of orders came from investors in Asia Pacific, 36 percent came from investors in Europe, Middle East and Africa, and 14 percent came from investors in the Americas.

In addition to the US dollar-denominated global bonds issued each year since 2000, IFC complements its public issuance by accessing a variety of different markets.

IFC’s Green bonds for instance, raise funds to support climate-smart business and social bonds to support on-lending to women-owned enterprises or companies that incorporate vulnerable populations.

IFC also issues local-currency bonds to develop local capital markets and to fund local-currency investments.

IFC notes that all its bond issuances are rated triple-A by global credit rating agencies: Standard & Poor’s and Moody’s.

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