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IFC Launches a new INCA Domestic Bond in Peru


Contact in Washington:
Adriana Gomez

Phone: +(202)458 5204
Email: Agomez@ifc.org


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 financing.


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.