Washington, D.C., March 7, 2018
—IFC, a member of the World Bank Group, today issued its first Kangaroo social bond, raising 300 million Australian dollars (233 million USD equivalent) for an innovative program that benefits women entrepreneurs and low-income people in emerging markets and conflict-affected states.
The issuance is part of IFC’s
Social Bond Program
, which was launched in March 2017 with a 500 million global benchmark bond denominated in U.S. dollars. The program gives investors the opportunity to have a positive impact on the lives of people living in developing countries, and at the same time enjoy a financial return on their investment.
Proceeds from the social bond support projects that provide finance to low-income people, including buying from smallholder farmers, or offering housing, education, and affordable healthcare. The funds will also be used to help lending to women-owned enterprises, and fund projects such as those that lend mainly to women entrepreneurs, including refugee women fleeing conflict.
The five-year Kangaroo bond was bought by more than 15 institutional investors across the world—including official institutions, pension funds, and fund managers. The issuance helps deepen the market for the growing category of Environment, Social and Governance-themed bonds in Australia. ANZ, Deutsche Bank, and Nomura acted as Joint Lead Managers.
“Our social bond creates an attractive alternative for investors seeking triple-A rated impact-investment products," said Jingdong Hua, IFC's Vice President and Treasurer. "IFC is very happy to include Australian dollars in the social bond landscape. We will continue to bring innovation and transparency to the Environment, Social and Governance bond market, unlocking additional funding for development.”
Since the launch of the IFC Social Bond Program in March 2017, IFC has issued eight social bonds in public and private markets across four different currencies, amounting to a total volume of $667 million. IFC’s Banking on Women and Inclusive Business Bond programs were merged into the IFC Social Bond Program and renamed. Including our original issuances, IFC’s social-themed bonds now total $1,231 million.
IFC has played a leadership role in developing guidelines and procedures for the green bond market and the burgeoning social bond market. IFC acts as co-chair of the working group on social bonds established by the Green Bond Principles Executive Committee. In line with the committee's social bond guidelines, the IFC Social Bond Program provides investors with detailed information on the underlying projects supported by the bonds. IFC released its annual Social Bond Impact Report just ahead of the launch of the Kangaroo social bond issuance.
IFC Social Bond Terms
Issuer: IFC (International Finance Corporation)
Amount: AUD $300 million
Settlement date: March 15, 2018
Maturity date: March 15, 2023
Issue price: 99.861%
Issue yield: 2.73%
Coupon: 2.7%
Underwriters: ANZ, Deutsche Bank, and Nomura
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. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
www.ifc.org
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