Washington, D.C., April 12, 2010—IFC,
a member of the World Bank Group, today announced the launch and pricing
of a five-year $2 billion benchmark issue, part of its regular program
of raising funds for private-sector development lending. IFC’s eleventh
annual global bond issue was oversubscribed by leading investors from around
The bond generated an order book in
excess of $2.5 billion, comprising almost 60 orders. It reflected one of
the tightest pricings—against U.S. Treasury securities—for a five-year
fixed-rate sovereign, supranational or agency bond since Germany’s five-year
U.S. dollar bond in 2005.
“The size of this year’s global bond
shows the confidence investors have in IFC and its careful financial management
through the crisis,” said Lars Thunell, IFC Executive Vice President and
CEO. “IFC's sustainable business model allows us to raise funding for
development and poverty reduction in areas where resources are needed most.”
Asian demand dominated, contributing
52 percent of orders. Investors in Europe and the Middle East and North
Africa accounted for 28 percent of demand. U.S. accounts, despite sensitivity
to the fine spread to Treasuries, constituted 20 percent of orders. Central
banks and official institutions were the largest buyers, with 73 percent
of demand. Commercial banks, corporations, insurance companies, and funding
managers provided a well-balanced distribution across a range of top-quality
real money accounts.
The bonds, which mature on April 20,
2015, and carry a semi-annual coupon of 2.75 percent, were priced to yield
15.9 basis points over the benchmark five-year U.S. Treasury bond. The
proceeds of this issue will be swapped into floating-rate U.S. dollar funds
that will be available for IFC’s general operations.
“We saw strong demand and steady execution
despite the volatility in underlying swaps and the US Treasury market,”
said Nina Shapiro, IFC Vice President for Finance and Treasurer.
“The breadth of demand was in part
due to the strong performance of previous IFC global bond issues. The level
of repeat subscription was also significant, illustrating the depth of
worldwide loyalty for IFC global bond issues amongst top-tier investors,”
Composition of demand for IFC Global
By Geographic Region By Investor Type
Asia—52% Central Banks/Official
EMEA—28% Banks and Corporates—13%
Deutsche Bank, HSBC ,and UBS acted as
joint lead managers for the issue.
IFC is the global leader among multilaterals
in private sector development finance, accounting for about 30 percent
of the financing committed by international financial institutions. Historically,
IFC has issued a $1 billion, five-year global bond that provides a benchmark
for IFC’s other borrowing, and for the structured products it arranges
for its clients.
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth in developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $14.5 billion in fiscal 2009, helping channel capital into developing
countries during the financial crisis. For more information, visit www.ifc.org