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IFC Launches a Colombian Peso Domestic Bond IFC’s third bond issue in Colombia


In Washington, D.C.:
Adriana Gomez

Phone: (202) 458 5204

Fax:     (202) 974 4384

E-mail:
agomez@ifc.org



Washington, D.C., June 24, 2004—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, today returned to the domestic Colombian bond market to issue a new peso (COP) bond offering.  The lead manager and arranger of the transaction is Corporacion Financiera Nacional y Suramericana S.A.(Corfinsura), co-arranger is BNP Paribas and Suramericana and Inversionistas de Colombia participated as syndicate members.


The domestic bond offering is for an amount of  269 billion Colombian Pesos (COP), approximately US$ 100 million equivalent, has a three-year maturity, carries a 10.99% coupon and was priced 123 basis points through domestic government debt (TES 2007).  “The transaction was an outstanding success.  The bonds were priced via a Dutch auction, resulting in a total orderbook consisting of 188 orders and in a transaction which was more than twice oversubscribed” said John Groesbeek, Senior Financial Officer at IFC.


In 2002, IFC successfully opened the domestic COP bond market (the “El Dorado” market) for multilateral entities by issuing a COP 225 billion 5-year domestic bond.  That transaction represented the first domestic bond offering by a supranational in Latin America.  Subsequently, several other multilaterals issued bonds in the Colombian market, and IFC followed with several domestic innovative structured finance transactions.

By launching this bond issue, IFC is showing its continued support to  Colombia and the further development of the domestic bond markets.  Nina Shapiro, IFC’s VP Finance and Treasurer, said: “IFC is delighted to have executed this new transaction in Colombia.  The establishment of the IFC credit in the domestic market, provides a sound base for the issuance of structured finance products for IFC’s clients.  Since our first COP offering, IFC has executed seven structured finance transactions in Colombia, including the first securitization of non-performing loans in the whole of Latin America, all of which further developed the domestic capital market.”


The proceeds of the issue were swapped into floating rate US dollar funds.  The end-benificiary of the swap is a Colombian entity, which was able to hedge part of its foreign currency liabilities into fixed rate local currency liabilities.


IFC funds its lending activities by issuing bonds in the international capital markets.  The Corporation’s securities, which are rated Aaa by Moody’s and AAA by S&P, have been issued in 30 different currencies.  IFC’s funding program for fiscal year 2004 is around US$3.5 billion.  IFC has been the first, or among the first, nonresidents to issue in many currencies including Spanish pesetas, Portuguese escudos, Greek drachmae, Hong Kong dollars and Singapore dollars in the domestic markets, and in Czech koruna, Polish zloty and Israeli shekel in the eurobond markets.


The mission of IFC (
www.ifc.org) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.