Int. finance corporation launches global bond to aid development

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The International Finance Corporation (IFC), a World Bank arm which finances private sector investment, has announced the launch and pricing of a five-year US$ 1 billion benchmark issue.

A statement from the IFC, received here Tuesday, said the IFC’s ninth annual glo bal bond issue attracted strong demand from investors around the world.

It said this was part of its regular programme of raising funds for development lending.

It said the bonds, which mature 15 May 2013, carried a coupon of 3.5 per cent, priced to yield 61 basis points over the benchmark US Treasury bond.

“We are delighted by the broad global reception to this issue, given the many un certainties in the international capital markets,” said IFC Vice President, Finance and Treasurer Nina Shapiro.

“The continued support for our loyal investor base and the welcome participation by some significant new accounts were instrumental to the success of this latest issue,” the statement said.

IFC said the issue was oversubscribed, with orders from almost 60 leading financial institutions.

Investors from Asia bought 35 per cent of the bonds, while investors in the Americas took 25 per cent and those in Europe and the Middle East took 40 per cent.

The statement said JP Morgan and Nomura were joint lead managers for the bonds, while the co-lead managers comprised BNP Paribas, Citi, Daiwa Securities, HSBC, Morgan Stanley, and UBS Investment Bank.

IFC said it planned to leverage its triple-A credit rating to raise about US$ 5 billion this fiscal year for investment and lending to promote the private sector in developing countries.

The statement said IFC’s annual US dollar global bond offering was a key element of its funding strategy.

It said the annual global issue provided a market benchmark, both for IFC’s other borrowing and the structured products it arranged for its clients.

The proceeds of this issue will be swapped into floating-rate US dollar funds th at will be available for IFC’s general operations.

IFC also borrows in emerging market currencies to promote the development of local capital markets.

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