Washington, D.C., July 24, 2018—
IFC, a member of the World Bank Group, today issued a $2 billion global bond, that will unlock financing to boost the private sector in developing countries, creating additional jobs, climate-smart businesses, and women entrepreneurs.
The heavily oversubscribed issuance—the five-year benchmark bond generated an order book of about $3.9 billion—indicated strong investor demand.
“The recent decision by our Board to support a $5.5 billion capital increase for IFC ensures that IFC will have the capacity to significantly scale up its investments in some of the most challenging and poorest countries – to spur private sector growth and create jobs, with a focus on climate finance, women’s entrepreneurship, infrastructure, and small and medium-sized businesses,” said Jingdong Hua, IFC Vice President & Treasurer. “
The reoffer yield was 2.978 percent—the equivalent of 15.25 basis points over the corresponding U.S. Treasury note. Central banks and other official institutions accounted for 61 percent of the orders, followed by banks at 33 percent. Seventy-seven percent of orders came from investors in the Americas and Asia combined. 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.
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This is another landmark transaction for IFC and an impressive achievement to begin the 2018/19 funding program,” said Lee Cumbes, Managing Director, Head of Public Sector EMEA, Barclays. “The transaction delivers the tightest pricing on record for a 5-year US Dollar SSA deal 2018—a fitting compliment for IFC’s standing in the market— whilst still delivering what central bank and treasury investors wanted, with a fair price, in a rare name and liquid format.”
Laura O’Connor, Fixed Income Origination and Syndication, TD Securities, said:
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IFC chose the optimal window to price the first USD benchmark transaction of their new fiscal year,” “Opting for the 5-year maturity, IFC captured global demand for a liquid cash alternative asset and executed the deal flawlessly. With this transaction, IFC achieved their tightest spread to mid-swap for a 5-year benchmark from the SSA sector since July 2015.”
Guy Reid, Managing Director, Head of EMEA Syndicate, Mizuho Securities, said: “IFC was quick to respond to strong investor demand for high-quality securities in the intermediate part of the curve. IFC was able to amass an order book of nearly US$4 billion at a negligible concession to secondary market levels despite an environment of tight credit spreads and narrow swap spreads—testament to the high regard IFC is held by international investors and the tireless work done with these investors over many years.”
IFC has issued US dollar-denominated global bonds each year since 2000. Most of its borrowings are swapped into variable-rate U.S. dollars. IFC also issues local-currency bonds to develop local capital markets and to fund local-currency investments, and discount notes in U.S. dollars. All IFC bond issuances are rated triple-A by Standard & Poor’s and Moody’s.
Final Terms
Issuer: IFC (International Finance Corporation)
Type: Global (SEC Exempt)
Amount: US$2 billion
Pricing date: July 24th, 2018
Settlement date: July 31, 2018
Maturity date: July 31, 2023
Issue price: 99.525%
Reoffer Yield: 2.978%
Coupon: 2.875%
Denomination: USD $1000
Listing: London
Joint Lead Managers: Barclays, JP Morgan, Mizuho Securities, TD Securities
Distribution by Geography (%)
Americas (38%)
EMEA (23%)
Asia Pacific (39%)
Distribution by Investor Type (%)
Central Bank/Official Institution: (61%)
Banks: (33%)
Asset Managers: (7%)
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org
