The International Finance Corporation (IFC), the private sector arm of the World Bank, has launched a five-year US$1bn issue under its Global Medium-Term Note programme. The notes, which have a final maturity of May 2, 2011, carry a coupon rate of 5.125% per year (payable semi-annually).
The bonds were priced today to yield 29bp over the benchmark US Treasury bond. The proceeds of the issue will be swapped into floating rate US dollar funds for IFC general operational purposes.
The joint lead managers are BNP Paribas and HSBC. Co-lead managers are ABN Amro, Citigroup, Daiwa Securities, JPMorgan, Mizuho, Nomura and UBS. This is the seventh successive year that IFC has launched a global US dollar benchmark issue.
For the fiscal year 2006 (ending June 30), IFC has a planned borrowing programme of up to US$2bn equivalent. IFC’s long-term debt is rated AAA by both Standard & Poor’s and Moody’s Investors Service.
The issue was oversubscribed and placed with over 50 high quality accounts globally. Asia accounted for 35% of the placement; North America, for 30%; and Europe, the Middle East, and Africa for 35%.
IFC achieved its strategic objectives of balanced global distribution at pricing compared to the sovereign and supranational peer group.
IFC vice-president, finance and treasurer Nina Shapiro says, “IFC was especially delighted with the market reception for this transaction, given changing market conditions and a more cautious investment outlook.”
A consistent issuance strategy resulted in broad global distribution. Shapiro adds that investors clearly appreciate the care the IFC takes in marketing, executing and supporting annual benchmark issues.
IFC’s annual US dollar global bond offering represents a key element of the corporation’s overall funding strategy. The objective is to provide a market benchmark for the IFC both in terms of other borrowings, and in structured finance for its clients. IFC also actively pursues borrowings in emerging market currencies to promote local capital markets.