Washington, D.C., April 14, 2005—The
International Finance Corporation (IFC), the private sector arm of the
World Bank Group, today returned to the domestic Peruvian bond market to
issue a new Soles (S/.) "INCA" bond offering in the amount of
S/. 100.0 million (approximately US$31.0 million equivalent). The
transaction was the second issuance under IFC’s Peruvian domestic debt
issuance program of S/. 500 million.
The three-year domestic bonds carry a 6.27% coupon and were priced around
33 basis points through the government yield curve. The bonds were
distributed via a bookbuilding system. The transaction was more than
twice oversubscribed and was broadly distributed with domestic institutional
investors. The arranger of the program and the transaction is Banco
de Crédito (BCP), the placement agent is Credibolsa S.A.B. S.A., and JP
Morgan acted as IFC’s financial advisor.
In 2004, IFC successfully opened the domestic S/. bond market for foreign
entities (the “INCA” market) by issuing a S/ 50 million, 3-year domestic
bond. That transaction also represented the first domestic public
bond offering by a multilateral in Peru. IFC worked closely with
the Peruvian authorities to prepare for this program.
By coming to the market with a second bond offering, IFC is showing its
continued support to Peru and the further development of domestic bond
markets. Nina Shapiro, IFC's Vice President Finance and Treasurer,
said: "We are very pleased to follow our inaugural “INCA” trade
with a new successful bond offering. This transaction should facilitate
additional IFC investments in Peru, particularly through structured finance
products to provide our Peruvian clients with local currency financing.”
“The book consisted of orders from 15 investors, including the major pension
funds, mutual funds, banks and public entities” said John Groesbeek, Senior
Financial Officer at IFC.
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 2005 is around $3.0 billion.
IFC has been the first nonresident to issue in many currencies including
Peruvian soles, Colombian pesos, Singapore dollars, Moroccan Dirham, and
Malaysian Ringitt in the domestic markets. This transaction will
facilitate other IFC investments in Peru, in particular via structured
products which will allow us to provide our clients with local currency
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in transition economies,
helping to reduce poverty and improve people's lives. IFC finances private
sector investments in the emerging markets, 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 FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.