London, June 22, 2015—IFC,
a member of the World Bank Group, introduced an innovative financial instrument
to expand the availability of Turkish lira financing, becoming the first
multilateral institution to issue lira-denominated discount notes.
IFC issued an inaugural tranche of discount notes in the amount of 100
million lira. The issuance is part of a broader program to regularly issue
lira-denominated discount notes and expand the availability of short- term
local-currency finance for private enterprises in Turkey. The notes are
issued under IFC's Global Discount Note Program, set up with London Stock
IFC issues discount notes in US dollars and CNH, the deliverable form of
Chinese renminbi that is traded outside mainland China. IFC is also exploring
opportunities to extend the program to other emerging- market currencies
where there is demand for short-term local-currency finance.
By setting up the Global Discount Note Program with London Stock Exchange,
IFC will strengthen its London presence, promote the development of an
offshore market for lira, renminbi and dollar- denominated instruments
as well as extend its cooperation with London Stock Exchange Group.
A discount note is a short-term debt obligation issued at a discount to
par. Discount notes have maturities of up to one year and are typically
issued by government-sponsored agencies or highly rated corporate borrowers.
"Adding Turkish lira as a currency to the IFC discount note program
introduces a new asset class for investors seeking high-quality credit,
and short-term financing alternatives in the lira market," said IFC
VP and Treasurer Jingdong Hua. "It reflects IFC’s strategy to meet
the growing demand for local-currency loans, especially at the short end
of the maturity spectrum."
IFC support capital market development in Turkey by providing local currency
loans—since 2011, IFC has committed 459 million Turkish lira, or approximately
$170 million, for private sector investment in the country. IFC also supports
Turkish corporates’ entry to the capital markets, participating as an
anchor investor in the bond market debuts of Sisecam, a glass and chemicals
producer, and Mersin International Port, which issued the first infrastructure
bond in Turkey. IFC also supported the first covered bond issuance by a
Turkish bank, Sekerbank, to help expand lending to small and medium enterprises.
IFC’s Global Discount Note Program increases its options for funding private
sector development in emerging markets. Proceeds of the programs are used
in part to fund the Global Trade Liquidity Program, a global initiative
to address the shortage of trade finance resulting from the global financial
crisis. In FY15 to date, IFC has issued discount notes in the amount of
$7 billion. Investors in IFC discount notes include central banks, treasuries,
asset managers and corporates.
IFC is rated triple-A by Moody’s Investors Service and Standard &
HSBC is the arranger for IFC’s lira-denominated discount note program.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. Working with private
enterprises in about 100 countries, we use our capital, expertise, and
influence to help eliminate extreme poverty and boost shared prosperity.
In FY14, we provided more than $22 billion in financing to improve lives
in developing countries and tackle the most urgent challenges of development.
For more information, visit www.ifc.org.