WASHINGTON, D.C., April 27, 2005
– The International Finance Corporation, the private sector arm of the World Bank Group, today launched a five-year US$1 billion issue under its Global Medium Term Note program. The notes, which have a final maturity of June 15, 2010, carry a coupon rate of 4.0 percent per year (payable semi-annually). The bonds were priced today to yield 23 basis points over the benchmark U.S. Treasury bond. The proceeds of the issue will be swapped into floating rate U.S. dollar funds for IFC general operational purposes.
The Joint Lead Managers are BNP Paribas, Citigroup and UBS Investment Bank. Co-lead Managers are Daiwa Securities, HSBC, JP Morgan, and Nomura. This is the sixth successive year that IFC has launched a global U.S. dollar benchmark issue, and it brings IFC’s market borrowings for the current fiscal year 2005 (July 1, 2004- June 30, 2005) to $ 2.1 billion. For the fiscal year as a whole, IFC plans a borrowing program of up to $2.5 billion equivalent. IFC’s long-term debt is rated triple-A by both Standard & Poor’s and Moody’s Investors Service.
The issue was heavily oversubscribed and placed with over 60 accounts globally. Asia accounted for 38 percent of the placement; North America, for 31 percent; and Europe, the Middle East, and Africa for 31 percent. As such it achieved IFC’s strategic objectives of balanced global distribution at pricing consistent with that of the top tier of the Corporation’s sovereign and supranational peer group.
IFC Vice President, Finance and Treasurer Nina Shapiro said “We are extremely pleased with the market reception for this transaction. The worldwide placement of this bond issue reflects the strong name recognition and following that IFC has developed with key investors in the international capital markets through its program of annual benchmark bond issues.” Ms. Shapiro added that she is especially pleased with the strong investor response in Europe and the United States, which significantly exceeded expectations.
IFC’s annual US dollar global bond offering represents a key element of the Corporation’s overall funding strategy. This objective of this transaction is to provide a pricing reference point for IFC in its supranational and sovereign peer group. This in turn helps IFC complete the balance of its annual funding program at effective cost.
Borrowings in emerging market currencies are a particularly important part of the balance of the funding program, especially transactions undertaken in domestic markets. Such transactions are effective in helping facilitate capital market development in IFC’s client countries. As a result of this strategy, IFC has been the first or among the first non resident borrowers in many of the currencies in which it has issued debt. IFC has borrowed in 33 currencies overall and currently has outstanding market borrowings amounting to about $17 billion.
The mission of IFC (www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
