Sao Paulo & Washington, D.C., October
31, 2007 — IFC, a member of the World Bank Group, has launched its
first Brazilian reais “Amaz˘nia” bond issue in the Brazilian domestic
capital markets to help deepen local markets and promote access to local
currency financing for local companies.
The proceeds of IFC’s bond, for an
amount of 200 million reais (about $111 million equivalent), will support
Brazilian businesses, which in turn help drive economic growth and create
“We are delighted with the opportunity
to contribute to Brazil’s domestic bond market through the Amaz˘nia Bond,”
said Nina Shapiro, IFC Vice President, Finance and Treasurer. “The Brazilian
capital markets are quite sophisticated, but our bond will add some credit
diversity. It will also facilitate further expansion of the fixed-rate
domestic bond markets, increasing access to long-term, fixed-rate financing
for private companies.”
The IFC reais bond marks the first domestic
bond offering in Brazil by a non-Brazilian issuer and should help pave
the way for future foreign issuers as well as further development of the
domestic fixed-rate bond market. It also represents the first fixed-rate
domestic bond offering other than issuances by the government and by BNDES,
Brazil's state-owned development bank.
Farida Khambata, IFC Vice President
for Latin America and the Caribbean, Asia, and the Middle East and North
Africa, noted, “This bond issue is part of IFC’s broader strategy to
deepen local capital markets in Brazil. It builds on our earlier efforts
in this area, including support to Bovespa for Novo Mercado, and, most
recently, in launching its Sustainability Index, the first of its kind
in Latin America.”
Since 1956, IFC has provided over $8.7
billion to support sustainable development of almost 200 private sector
companies in Brazil. As of June 2007, the committed portfolio for
IFC’s own account in the country totaled $1.6 billion, the Corporation’s
largest in Latin America and the Caribbean.
IFC Vice President Nina Shapiro also
emphasized that, “The IFC Amaz˘nia Bond fits with the World Bank Group’s
goal to support sustainable development of the private sector, which has
proved to be an effective engine of growth and development by creating
jobs and economic opportunities.”
The Amaz˘nia Bond carries a 11.96 percent
rate and has a final maturity date of January 3, 2011. Arrangers
for the offering were Banco ABN AMRO Real S.A. (Lead Arranger) and Banco
Itau BBA S.A. The issue was 2.5 times oversubscribed and achieved
broad distribution, with approximately 20 local investors participating,
including pension funds and mutual funds.
IFC’s funding activities focus on two
key goals: securing funds to meet IFC’s annual funding requirements on
a long-term basis as well as stimulating growth in emerging capital markets
by issuing bonds in local currencies. For the fiscal year ending June 30,
2008, IFC has a planned borrowing program of up to $5 billion equivalent.
IFC’s long-term debt is rated triple-A by both Standard & Poor’s
and Moody’s Investors Service.
IFC has been the first, or among the
first, nonresidents to issue in many currencies. These include Colombian
pesos, Peruvian soles, Chinese renminbi, CFA West Africa, Greek drachmae,
Hong Kong dollars, Malaysian ringgit, Moroccan dirham, Singapore dollars,
and Spanish pesetas in the domestic markets; and Czech koruna, Philippine
pesos, and Polish zloty in the Eurobond markets.
IFC, a member of the World Bank Group,
fosters sustainable economic growth in developing countries by financing
private sector investment, mobilizing private capital in local and international
financial markets, and providing advisory and risk mitigation services
to businesses and governments. IFC’s vision is that poor people have the
opportunity to escape poverty and improve their lives. In FY07, IFC committed
$8.2 billion and mobilized an additional $3.9 billion through loan participations
and structured finance for 299 investments in 69 developing countries.
IFC also provided advisory services in 97 countries. For more information,
IFC in Brazil
IFC’s strategy in Brazil focuses on
projects that promote access to finance, including microfinance and financial
markets development. IFC also supports export-oriented companies
where we can help improve corporate governance and set environmental and
social benchmarks, particularly in sensitive sectors such as agribusiness.
Helping local companies become regional or global players is at the core
of IFC’s strategy, as well as financing the infrastructure sector, particularly
ports, power, railways, and roads. IFC will continue partnering with key
players to promote sustainable practices in Brazil’s private sector.
In fiscal year 2007 (June 2006-July
2007), Brazil received the largest amount of IFC financing, in dollar value,
among Latin American countries. During this period, IFC invested $509 million
in private sector projects in a range of industries, from agribusiness
and transportation to manufacturing and the financial sector. IFC’s total
committed portfolio in Brazil at the end of June 2007 was $1.6 billion.