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IFC Launches $2 Billion Global Bond to Strong Demand from Investors Worldwide

Washington, D.C., April 12, 2010 —IFC, a member of the World Bank Group, today announced the launch and pricing of a five-year $2 billion benchmark issue, part of its regular program of raising funds for private-sector development lending.  IFC’s eleventh annual global bond issue was oversubscribed by leading investors from around the world.  
The bond generated an order book in excess of $2.5 billion, comprising almost 60 orders. It reflected one of the tightest pricings—against U.S. Treasury securities—for a five-year fixed-rate sovereign, supranational or agency bond since Germany’s five-year U.S. dollar bond in 2005.
“The size of this year’s global bond shows the confidence investors have in IFC and its careful financial management through the crisis,” said Lars Thunell, IFC Executive Vice President and CEO. “IFC's sustainable business model allows us to raise funding for development and poverty reduction in areas where resources are needed most.”
Asian demand dominated, contributing 52 percent of orders. Investors in Europe and the Middle East and North Africa accounted for 28 percent of demand. U.S. accounts, despite sensitivity to the fine spread to Treasuries, constituted 20 percent of orders. Central banks and official institutions were the largest buyers, with 73 percent of demand. Commercial banks, corporations, insurance companies, and funding managers provided a well-balanced distribution across a range of top-quality real money accounts.
The bonds, which mature on April 20, 2015, and carry a semi-annual coupon of 2.75 percent, were priced to yield 15.9 basis points over the benchmark five-year U.S. Treasury bond. The proceeds of this issue will be swapped into floating-rate U.S. dollar funds that will be available for IFC’s general operations.
“We saw strong demand and steady execution despite the volatility in underlying swaps and the US Treasury market,” said Nina Shapiro, IFC Vice President for Finance and Treasurer.
“The breadth of demand was in part due to the strong performance of previous IFC global bond issues. The level of repeat subscription was also significant, illustrating the depth of worldwide loyalty for IFC global bond issues amongst top-tier investors,” said Shapiro.
Composition of demand for IFC Global issue:
By Geographic Region         By Investor Type
Asia—52%         Central Banks/Official Institutions—73%
EMEA—28%         Banks and Corporates—13%
US—20%        Funds Managers—9%
        Insurance Companies—5%
Deutsche Bank, HSBC ,and UBS acted as joint lead managers for the issue.
IFC is the global leader among multilaterals in private sector development finance, accounting for about 30 percent of the financing committed by international financial institutions. Historically, IFC has issued a $1 billion, five-year global bond that provides a benchmark for IFC’s other borrowing, and for the structured products it arranges for its clients.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit