By Bamidele Obafemi
International Finance Corporation (IFC), a member of the World Bank Group, today issued a $2 billion, five-year global bond. The issue is part of IFC’s regular programme of raising funds for private sector development lending, and brings IFC’s funding programme to over 90 per cent of its total target for Financial Year 2013.
“Our global bond programme is an essential part of our strategy to support projects that foster inclusive growth and shared prosperity in developing countries,” said Jingdong Hua, IFC Vice President and Treasurer. “The strong market interest in this offering reflects the quality of IFC’s investment portfolio and the increasingly significant role developing countries are playing in driving the global economy.”
Consistent with IFC’s practice, the proceeds of this issue will be swapped into floating-rate U.S. dollar funds that will be available for IFC investments in emerging markets. IFC has issued a dollar-denominated global bond each year since 2000. In the past two years, IFC issued two global bonds during each calendar year. All IFC bond issuances are rated triple-A by Standard & Poor’s and Moody’s. IFC debt receives a zero risk weighting under Basel II.
Wolfgang Meyer, IFC Director for Treasury Market Operations, said: “With this issue, IFC continues to show that we are a regular and committed issuer in the global capital markets. Our strategy is to remain flexible and continually assess market conditions to ensure that our issues achieve optimal results in terms of spreads.”
IFC’s funding programme for this fiscal year is $10 billion. IFC raises funds across a range of markets and currencies. Borrowings denominated in U.S dollars account for the majority of IFCs’ funding program. Other funding sources include the Australian-dollar Kangaroo market, the U.S. domestic market, and the Japanese retail market. IFC also issues local currency bonds to develop local capital markets and to fund local currency loans, as well as theme bonds such as as green bonds which go to support climate-change related projects.
The transaction was lead managed by Citi, JPMorgan, and Nomura.