Moscow/Washington, D.C., November 28,
2012 – IFC, a member of the World Bank Group, today launched an inaugural
Volga bond, raising 13 billion Russian rubles (equivalent to about $410
million) for private sector development. The five-year bond is IFC’s first
ruble-denominated bond placed in the Russian market. It is the first corporate
bond issued in Russia that has its coupon linked to an inflation-target
index, and the largest domestic placement by an international issuer.
“Vibrant, efficient domestic capital markets are the foundation for shared
prosperity and lasting growth,” said Jingdong Hua, IFC Vice President
and Treasurer. “They provide long-term funding for key economic sectors
such as infrastructure, and protect against capital-flow shocks. Developing
such markets is a cornerstone of our strategy in emerging markets, and
a priority for IFC.”
IFC’s bond is aimed for investors who benchmark their returns to the difference
between predicted and actual prices. It is linked to an index that broadly
approximates the performance of the Russian Consumer Price Index. Such
inflation-linked issuances will pave the way for a market-based mechanism
that can reduce the adverse impacts of inflation on real returns earned
by Russian investors.
Tomasz Telma, IFC Director for Europe and Central Asia, said: “The Volga
bond supports IFCs strategy to strengthen domestic capital markets in Russia.
It offers a high-quality investment alternative for institutional investors
such as pension funds and will encourage greater investor participation
in the markets. It will also increase access to long-term local currency
finance, protecting firms from currency risk as they grow and create jobs.”
IFC gained approval from the Russian Federal Service for Financial Markets
to issue ruble-denominated bonds in the country’s capital markets earlier
this month. The approval enables IFC to issue up to 23 billion rubles (approximately
IFC issues bonds as part of its regular program of raising funds for private
sector development. Ruble proceeds from the Volga bond will be used to
invest in private sector companies in Russia. A portion of the proceeds
may be swapped into floating-rate U.S.-dollar funds that are available
for IFC investments in a variety of emerging markets.
IFC, a member of the World Bank Group, is the largest global development
institution focused exclusively on the private sector. We help developing
countries achieve sustainable growth by financing investment, mobilizing
capital in international financial markets, and providing advisory services
to businesses and governments. In FY12, our investments reached an all-time
high of more than $20 billion, leveraging the power of the private sector
to create jobs, spark innovation, and tackle the world’s most pressing
development challenges. . For more information, visit www.ifc.org.