Washington, D.C., Oct. 22, 2021— IFC issued today a new short 2.5 year social Floating Rate Note ("FRN") raising USD 500 million to improve the lives of the most vulnerable in developing countries, including strengthening the resilience of health systems to pandemics. This is the first Social Secured Overnight Financing Rate ("SOFR") FRN issued to date in the market.
The social SOFR FRN will benefit under-served populations in emerging and developing markets, supporting IFC's continued pandemic response as well as its long-term strategy to build resilient health systems that can better respond to future health crises.
"This social bond issuance comes at a very important time," said Tomasz Telma, IFC's Senior Director for Manufacturing, Agribusiness and Services. "The pandemic has taken a huge toll in developing countries, and very clearly showed a need to shift our focus to creating a pandemic resilient health system that includes both private and public solutions."
IFC has invested more than $2.4 billion for healthcare and health systems in emerging markets since the pandemic began. IFC's strategy, delivered in partnership with the World Bank, includes expanding quality healthcare and strengthening collaboration between the public and private health sectors, promoting relevant digital health innovations, and strengthening supply chains so needed products are reaching health providers and patients.
This issuance is part of IFC's Social Bond Program, which gives investors the opportunity to support innovative programs that will have positive social impacts in developing countries while providing investors with a financial return on their investment – in this instance, the return is variable and linked to the SOFR Index.
Through the Social Bond Program, IFC finances social projects that benefit women-owned enterprises, inclusive business projects, and projects that meet the criteria stipulated in the Social Bond Principles, which include: affordable basic infrastructure (e.g. clean drinking water, sewers, sanitation, transport, energy); access to essential services (e.g. healthcare, education and vocational training, financing and financial services); affordable housing; employment generation including through the potential effect of small-and medium-sized enterprise financing and microfinance; food security; and socioeconomic advancement and empowerment.
IFC was the first issuer to launch a U.S. dollar public benchmark social bond during the COVID-19 crisis. IFC's largest social bond – a $1 billion-dollar social bond – was issued on the same day that the World Health Organization declared the coronavirus outbreak a global pandemic on March 11, 2020.
IFC's Social Bond Program was launched in March 2017 with a 500 million global benchmark bond denominated in U.S. dollars. With today's issuance, IFC's cumulative social bond issuance reaches $4.4 billion through 67 social bonds.
Bond Summary Terms
Issuer: IFC (International Finance Corporation)
Issue ratings: Aaa / AAA (stable / stable)
Format: Global SEC exempt
Amount: USD $500 million
Settlement: October 29, 2021
Maturity: April 3, 2024
Coupon: SOFR + 9bps
Listing: London Stock Exchange
Denominations: US$1k + US$1k
Docs: Issuer's Global Medium-Term Note Program
Underwriters: BMO Capital Markets Corp., Wells Fargo Securities;
Senior Co-Lead: CastleOak Securities, L.P.
Central Banks/Official Institutions: 58%
Asset Managers: 12%
Corporates/Pension funds/Insurance companies: 9%
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.