Sydney, Australia, December 8, 2023—IFC, a member of the World Bank Group, issued a new Kauri bond, raising 500 million New Zealand dollars to support private businesses and help create jobs in developing countries.
The five-year fixed-rate bond is the first New Zealand dollar denominated Kauri bond to be issued by a supranational, sovereign agency in four months and the first after the Reserve Bank of New Zealand (RBNZ) released an update on its liquidity policy review on December 5.
"This is IFC's first new bond line issued in the New Zealand market in 2023 and we are delighted with the robust interest that we got from domestic and off-shore investors," said Marcin Bill, Head of Funding for Asia Pacific at IFC. "The first round of the RBNZ liquidity policy review that was released on the morning of the bond launch supported the trade."
IFC has an established curve in the New Zealand dollar market. IFC's other issuance this year was a 275 million New Zealand dollar tap to an existing social bond that matures in December 2029.
The new bond launched at what was the tightest spread against the equivalent New Zealand government bond seen in a number of years.
Commonwealth Bank, BNZ Capital Markets, ANZ acted as joint lead managers for the transaction.
"CBA congratulates the IFC team on a fantastic trade which demonstrates IFC's commitment to the New Zealand market. This impressive five-year benchmark has reopened the SSA Kauri market after a four-month hiatus and has presented a meaningful investment opportunity to local investors following the positive outcome of the RBNZ Liquidity Policy Review update," said Desmond Fennell, Managing Director and Head of Capital Markets and Syndicate, Commonwealth Bank.
"It was excellent to see IFC reopen the Kauri market, with primary issuance having been absent since August. Investors responded positively to the opportunity, and it was encouraging to see a mix of both domestic and offshore accounts engaged in the transaction" said John Vanderbom, Director, BNZ Capital Markets.
"This week's New Zealand dollar five-year was a welcome step for the New Zealand market, which has faced some headwinds throughout the year. IFC's enduring reputation ensured the transaction was well-received by investors. Despite the headwinds IFC has had a strong year in Kauri issuance, having accessed the market a number of times. It has been a privilege for ANZ to work with the IFC team once again for this transaction, wrapping up a successful year," said Simon Eckhoff, Director, Capital Markets & Syndicate, ANZ.
Final Terms
Issuer: International Finance Corporation (IFC)
Ratings: Aaa (stable) / AAA (stable) (Moody's/ S&P)
Issue Amount: NZ$500,000,000
Pricing Date: December 6th, 2023
Settlement Date: December 19th, 2023 (T + 9)
Maturity Date: December 19th, 2028
Re-Offer Price/Yield: 99.719492%/ 4.939%
Coupon: 4.875% s.a.
Re-offer Spread to Swaps: Mid swap +33bps
Re-offer vs. Benchmark: NZGB 3.0% 20 April 2029 +27.4bps
Joint Lead Managers: ANZ | BNZ | CBA
Distribution Statistics
| Investor Type | |
| Bank/ Bank Treasury | 96.1% |
| Asset Managers | 3.9% |
| | |
| Geography | |
| New Zealand | 83.0% |
| Asia | 15.0% |
| Other | 2.0% |
