IFC raises $3.5 bn through bond issue

28 Aug 2013

International Finance Corporation (IFC), a member of the World Bank Group, has raised $3.5 billion through bond issue, its largest to date, as part of the lender's ongoing fundraising programme for private sector development in emerging markets.

The bonds of 5-year maturity carry a semi-annual coupon rate of 1.75 per cent. All IFC bonds are triple-A rated by credit rating agencies Standard & Poor's and Moody Investor Service.

IFC vice president and treasurer Jingdong Hua said in a statement, ''IFC's funding operations are at the core of our business. They enable us to meet the financing needs of private sector companies in emerging markets, and provide IFC with sufficient liquidity to fulfil our counter-cyclical role in a fragile global economy.''

''IFC's priority is to support a vibrant, sustainable private sector that contributes to eradicating extreme poverty and pursuing shared prosperity in emerging markets and globally,'' he added.

In line with IFC's practice, the proceeds of this issue will be swapped into floating-rate US dollar funds that will be available for IFC investments in emerging markets. The organisation has issued dollar-denominated global bonds each year since 2000.

IFC plans to raise $16 billion during its current fiscal year ending June 2014.

The present issue generated an order book of close to $5 billion and set the pricing benchmark for IFC's borrowing programme. Geographically, Asian region accounted for 48 per cent of the orders followed by Europe, the Middle East and Africa with 40 per cent and the Americas with 12 per cent.

According to investor type, the central banks and official institutions accounted for 64 per cent of the orders, followed by banks and corporate with 26 per cent and fund managers 10 per cent.

''The strong demand for IFC's global bond in a difficult market environment reflects our strong reputation as a committed issuer in the capital markets. The success of the issue leaves us well-positioned as we seek to meet IFC's largest funding programme to date,'' Wolfgang Meyer, IFC director for treasury market operations, commented.

Washington-based IFC, established in 1956, is the largest global development institution focused exclusively on the private sector.

Working with private enterprises in more than 100 countries, the organisation uses its capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In fiscal 2013, its investments climbed to an all-time high of nearly $25 billion.

The transaction was lead managed by Daiwa, Deutsche Bank, HSBC, and TD.

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