Washington, D.C., April 5, 2011
—IFC, a member of the World Bank Group, 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 global bond issue was oversubscribed by leading investors from around the world.
The bond generated an order book in excess of $2.3 billion, comprising almost 60 orders. This is the first sub-Libor five-year issue by a supranational since the fall of 2008.
“The consistently strong reception for our annual global bonds shows the confidence in IFC from investors around the world,” said Lars Thunell, IFC Executive Vice President and CEO. “IFC's sustainable business model allows us to raise funding to support private sector development and job creation in areas where resources are needed most.”
There was balanced global demand for the issue. Investors from Africa, Europe, and the Middle East contributed 35 percent of orders; investors in Asia accounted for 33 percent of demand; and investors in the Americas constituted 32 percent of orders. Central banks and official institutions were the largest buyers, with 65 percent of demand. Commercial banks, corporations, and funding managers provided a well-balanced distribution across a range of top-quality real-money accounts.
The bonds, which mature on April 11, 2016, and carry a semi-annual coupon of 2.25 percent, were priced to yield 18.4 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.
“The successful outcome of the issue reflects seamless execution by the transaction team as well as the strong worldwide appeal for IFC’s global bonds,” said John Borthwick, IFC Deputy Treasurer and head of the funding department.
Composition of demand for IFC Global issue:
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By Geographic Region
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By Investor Type
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Asia—33%
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Central Banks/Official Institutions—65%
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EMEA—35%
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Banks and Corporates—21%
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Americas—32%
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Funds Managers—14%
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Bank of America Merrill Lynch, Daiwa Capital Markets, and JP Morgan were the 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, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit
www.ifc.org
.
