Lusaka/Washington, September 19, 2013—IFC,
a member of the World Bank Group, today issued a 150 million kwacha bond—equivalent
to approximately $28.4 million—to support domestic capital markets and
increase access to local-currency finance in Zambia.
The issue, dubbed “Zambezi” bond, is IFC’s first kwacha-denominated
bond. It is also the first placement by a nonresident issuer in Zambia’s
domestic capital markets, and the first issuance under the IFC Pan-Africa
Domestic Medium Term Note Programme.
“Vibrant domestic capital markets create access to long-term, local-currency
finance for the private sector—the key engine of job creation in emerging
markets,” said Jingdong Hua, IFC Vice President and Treasurer. “The IFC
Zambezi bond supports our efforts to deepen domestic capital markets in
Africa, so they can sustain a thriving private sector in the region.”
In July 2013, IFC received approval for a local-currency bond program in
Zambia. Under the program IFC can issue bonds of up to 2.5 billion Zambian
kwachas (approximately $460 million). Standard Bank and Stockbrokers Zambia
Ltd. are co-lead arrangers for the program.
The four-year bond was designed to appeal to a broad range of domestic
and international investors looking to diversify their portfolios. The
order book was over 700 million kwacha, equivalent to an oversubscription
of 4.8 times. Investors include Zambian pension funds, international and
domestic asset managers, insurance companies, and banks. The bond was issued
at par and priced with a yield of 15 percent p.a.
IFC Director for Eastern and Southern
Africa Oumar Seydi said: “The IFC Zambezi bond supports the efforts of
the government and authorities to deepen domestic capital markets in Zambia.
Such markets are an important source of local-currency funding, in line
with IFC’s strategy for broader private sector development through micro,
small and medium enterprises and other essential economic sectors.”
In May 2012, IFC launched its Pan-African Domestic Medium-Term Note Programme,
which focuses on Botswana, Ghana, Kenya, Namibia, Rwanda, South Africa,
Uganda, and Zambia. Proceeds from the program will be used to support IFC’s
private sector development program.
IFC issues local currency denominated bonds as part of its regular program
of raising funds for private sector development, and to support the development
of domestic capital markets. In many cases IFC is the first, or among the
first, nonresident issuers. IFC bonds are rated triple-A by Moody’s Investors
Service and Standard & Poor’s.