Washington, D.C., November 30, 2022—IFC issued its first New Zealand dollar-denominated social bond in the Kauri market to support underserved communities in developing countries including women entrepreneurs and low-income households in need of access to essential services.
The seven-year fixed-rate bond raises 300 million New Zealand dollars. It will support the development of the environmental, social and governance (ESG) bond market in New Zealand following the recent inaugural New Zealand government green bond issued in early November.
Proceeds from IFC's social bond program fund a diverse range of social projects. Benficiaries include women-owned small business owners who lack access to finance, companies that incorporate people at the "base of the economic pyramid" into their value chain as suppliers, distributors, or customers, as well as households that lack access to quality healthcare.
IFC has an established curve in the New Zealand dollar market with its most recent issuance being a 400 million New Zealand dollar five-year bond issued in September this year.
"IFC's debut Kauri social bond will strengthen the New Zealand dollar sustainable bond market and unlock additional funding to support vulnerable communities with access to finance and basic services such as healthcare," said John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization.
"Demand from investors was solid—especially in light of the social theme which helped widen the investor base and increase the size of orders. The seven-year maturity also allowed us to extend our yield curve in New Zealand dollars after IFC issued a five-year note earlier this year."
The proceeds of the bond will be allocated to a designated sub-portfolio linked to lending operations for social bond eligible projects.
IFC launched a social bond programme in 2017 when it issued the first-ever US dollar social bond global benchmark. Since then, IFC has been a frequent issuer of social sonds in public and private markets, in various currencies and tenors. The program aligns with the Social Bond Principles published by the International Capital Market Association (ICMA).
BNZ, Commonwealth Bank of Australia, and Westpac acted as joint lead managers for the transaction.
"BNZ is proud to have assisted IFC on its inaugural New Zealand dollar social Kauri bond. After issuing the first New Zealand green Kauri bond in New Zealand in 2017, this transaction marks a continuation of IFC's commitment to the country's sustainable finance market. Congratulations to the IFC team on another successful result," said Mike Faville, Head of Debt Capital Markets at BNZ.
"CBA congratulates the IFC team on a fantastic inaugural social Kauri. This impressive seven-year benchmark has reopened the SSA Kauri market after a three-month hiatus and has presented a meaningful socially responsible investment opportunity to local investors," said Desmond Fennell, Head of Capital Markets and Syndicate at CBA.
"Westpac was delighted to be involved in IFC's inaugural Kauri social bond, which contributes to the depth and development of the New Zealand dollar sustainable bond market. IFC's on-going commitment to the New Zealand dollar market helped to ensure strong domestic participation and a highly successful execution outcome," said Mat Carter, Head of Debt Capital Markets and Syndicate at Westpac.
Final Terms
Issuer: International Finance Corporation (IFC)
Ratings: Aaa (stable) / AAA (stable) (Moody's/ S&P)
Issue Amount: NZ$300,000,000
Pricing Date: November 30th, 2022
Settlement Date: December 13th, 2022 (T + 9)
Maturity Date: December 13th, 2029
Re-Offer Price/Yield: 99.900255%/ 4.892%
Coupon: 4.875% s.a.
Re-offer Spread to Swaps: Mid swap +41bps
Re-offer vs. Benchmark: NZGB 3.0% 20 April 2029 +67.2bps
Joint Lead Managers: BNZ | CBA | Westpac
Distribution Statistics
|
Investor Type | |
| Bank/ Bank Treasury | 83.40% |
| Asset Managers | 10.30% |
| Trading | 6.30% |
| | |
|
Geography | |
| New Zealand | 97.70% |
| Asia | 2.30% |
About IFC
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 2022, IFC committed a record $32.8 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 global compounding crises. For more information, visit www.ifc.org.
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