Washington, D.C., August 6, 2018—IFC,
a member of the World Bank Group, issued a triple-A rated bond in Costa
Rica’s domestic market, raising 5.7 billion colones, or approximately
USD$10 million. The bond’s proceeds will be used to boost housing finance
for low and middle-income families who otherwise lack access to mortgage
The Irazu II bond marks IFC’s second issuance in local currency in Costa
Rica. It has a five-year maturity and a net yield of 8.44 percent per annum.
IFC will invest the proceeds of the Irazu II bond in Coopenae, a leading
savings and credit cooperative with over 110,000 members. The proceeds
of the bond complement an IFC USD$10 million loan provided to Coopenae
in April 2018 to finance affordable housing.
“Buying a house or apartment is a dream for many families,” said Adrian
Alvarez, Coopenae CEO. “By partnering with IFC, we will be able to provide
more of our member families with responsible financial solutions to become
The Costa Rican government estimates an annual gap of USD$4.4 billion to
meet demands in housing finance. The mortgage market has substantial room
for expansion. Currently, it represents only 16 percent of the country’s
gross domestic product, below countries with similar income levels such
as Panama (22 percent) and Chile (24 percent).
“Developing local capital markets is critical to providing long-term,
local-currency finance for the private sector,” said Luc Grillet, IFC
Senior Manager for Central America and the Caribbean. “This is key to
creating jobs and opportunities in emerging markets like Costa Rica.”
Finanzas Corporativas de Centroamérica (FCCA), an investment bank, was
the lead arranger for the bond issuance.
“Local institutional investors have appetite for local currency bonds
and showed interest in backing IFC's development goals in Costa Rica,”
said Roberto Venegas, FCCA President and CEO. “We recognize the importance
of developing the domestic capital markets and acknowledge the role IFC
is taking in this regard.”
BN Vital OPC, a pension operator, invested in the bond.
“We were interested in the triple-A rating of the bond as well as the
destination of the proceeds,” said Hermes Alvarado, BN Vital OPC CEO.
IFC supports capital markets by issuing local currency bonds, providing
investment alternatives for institutional investors ad private sector companies.
In Latin America and the Caribbean, in addition to Costa Rica, IFC has
issued domestic local currency bonds in Brazil, Colombia, the Dominican
Republic, and Peru.
IFC has a USD$372 million portfolio in Costa Rica in sectors such as infrastructure,
renewable energy, and financial markets. Through its advisory programs,
IFC works with the government and companies to help establish the conditions
that will attract the most private capital, enabling the private sector
to grow and create jobs.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In fiscal year 2018, we delivered more
than USD$23 billion in long-term financing for developing countries, leveraging
the power of the private sector to end extreme poverty and boost shared
prosperity. For more information, visit www.ifc.org