Washington, D.C., April 18, 2013—
IFC, a member of the World Bank Group, issued a record $500 million in local-currency bonds in three emerging markets in fiscal 2013, expanding access to finance for private enterprises in developing countries and helping insulate them from foreign-exchange risks.
Since November 2012, IFC successfully issued local-currency bonds in Russia, the Dominican Republic, and Nigeria. In all three cases, IFC put in place an issuance model that will pave the way for other high-credit issuers. IFC typically issues one local-currency bond per fiscal year. To date, IFC has issued local-currency bonds in 12 markets globally.
“Local-currency bonds are an essential part of our strategy to support the development of local capital markets,” said IFC EVP and CEO Jin-Yong Cai. “Such markets are the foundation for a thriving private sector because they create access to finance for key sectors such as housing, infrastructure, and small and medium enterprises, and because they help mitigate foreign-exchange risks.”
Recognizing those risks, finance ministers and central bank governors from the Group of 20 advanced and developing economies in 2011 called for a concerted effort to support local-currency bond markets in developing countries. They said such markets can provide a “spare tire” in a financial crisis, tapping local investors as a powerful alternative source of finance.
IFC has played a prominent role in that effort. This week IFC is bringing together seven international finance institutions to discuss ways to increase collaboration and improve coordination to accelerate the development of local capital markets and increase access to local-currency finance in emerging markets.
The IFC Russian "Volga" bond was the first local-currency bond in Russia linked to an inflation index, protecting returns for investors from inflation. The IFC Nigerian "Naija" bond was the first issue by a non-resident issuer in the domestic capital markets. The IFC Dominican Republic "Taino" bond is the first IFC bond in Latin America and the Caribbean whose proceeds are directly linked to investments in the local private sector—funds raised were immediately invested to support access to finance for housing and for small and medium enterprises.
In addition to issuing local-currency bonds, IFC provides local-currency financing to meet the needs of the private sector. IFC has provided over $10 billion in local-currency financing across 58 currencies—more than any other international finance institution.
IFC’s fiscal year runs from July 1 through June 30.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
.
Stay Connected
