Washington, D.C., November 30, 2023 - IFC issued a three-year social bond, raising $1.5 billion to support low-income communities in emerging markets.
The transaction represents IFC's largest ever social bond, with its largest ever order book. It is also the largest US dollar social bond issued by a supranational this year. This is IFC's first US dollar denominated social bond benchmark in 2023, complementing the organization's Canadian dollar and Australian dollar social bond benchmarks issued earlier this year.
"We are seeing tremendous demand from investors for our social bonds. With order books of over $6 billion, and robust interest from quality investors, this issuance was no exception," said Tom Ceusters, Director, Treasury Market Operations at IFC. "The bond will unlock additional funding support for marginalized and vulnerable communities in developing countries across the globe."
BNP Paribas, TD Securities and Wells Fargo acted as joint lead managers for the transaction.
"BNP Paribas is pleased to bring IFC back to the US dollar benchmark market with its largest ever social bond which gathered an unprecedented volume of demand for the issuer. The transaction illustrates the prominent role that IFC plays not only in financing social projects but also in shaping and further developing this market for others to follow on solid footsteps," said Nathaniel Timbrell-Whittle, Global Head of SSA Syndicate, BNP Paribas.
"Congratulations to the entire IFC team on an exceptional outcome on today's US dollar benchmark transaction! Gathering one of the largest ever US dollar orderbooks for IFC, at this point in the calendar year, this is clear evidence of IFC's strong and established standing in the SSA community. TD is delighted to be a joint lead manager on this transaction," said Laura O'Connor, Managing Director, Head of UK DCM, TD Securities.
"Congratulations to the IFC team! No better way to close the calendar year, than with a truly phenomenal US dollar 'social bond' benchmark. Transaction garnered an impressive $6.7 billion orderbook with high quality orders across all regions allowing IFC to tighten guidance by 2bps to MS+33bps, equivalent to +8.2bps over the three-year US Treasury, the tightest UST spread in record this year for any SSA transaction in this tenor. Also, solid participation from official money and social-specific investors. IFC has definitively showed the market what they are made of," said Carlos Perezgrovas, Head of SSA Origination, Wells Fargo Securities.
The proceeds of the bond will be allocated to a designated sub-portfolio linked to lending operations for social bond eligible projects.
IFC's Social Bond Program, launched in 2017, offers bond investors an opportunity to allocate investments to the achievement of certain SDGs and achieve positive social outcomes without any additional credit risk than that of IFC as a triple-A rated issuer.
Proceeds from the bonds fund a diverse range of social projects which include: affordable basic infrastructure (e.g. clean drinking water, sewers, sanitation, transport, energy); access to essential services (e.g. education and vocational training, healthcare, financing and financial services); affordable housing; women-owned small and medium sized businesses who lack access to finance; and companies that incorporate people at the "base of the economic pyramid" into their value chain; as well as food security.
IFC is a frequent issuer of social bonds in public and private markets, in various currencies and tenors. The Social Bond Program aligns with the Social Bond Principles published by the International Capital Market Association (ICMA).
Since launching its Social Bond Program in 2017, IFC has issued over $8 billion through 92 social bonds and taps in 14 currencies.
IFC Social Bond Terms
| Issuer | International Finance Corporation ("IFA") |
| Issuer rating | Aaa/AAA (Moody's / S&P) all stable |
| Amount | USD 1.5 billion |
| Settlement date | 6 December 2023 (T+5) |
| Maturity date | 15 January 2027 |
| Reoffer vs. SOFR Mid-swaps | SOFR MS +33 bps |
| Reoffer vs. Benchmark | +8.2 bps over three-year US Treasury |
| Reoffer Price/Yield | 99.674 / 4.490% s.a. |
| Coupon | 4.375% s.a. |
| | |
| Listing: | Luxembourg Stock Exchange's Regulated Market and London Stock Exchange's Regulated Market |
| Lead managers: | BNP Paribas, TD Securities, Wells Fargo |
| ISIN: | US45950KDF49 |
Distribution Statistics
Type
Central Banks/Official Institutions: 58%
Banks: 25%
Asset Managers/Corporates/Other: 17%
Geography
Americas: 39%
Europe, Middle East, Africa: 34%
Asia Pacific: 27%
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 2023, IFC committed a record $43.7 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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