IFC raises $2 B for investments in emerging markets

MANILA, Philippines — The International Finance Corp. (IFC), the private sector arm of the World Bank, has raised over $2 billion from the global bond market to support its investments in emerging and developing markets.

In an announcement on its website yesterday, the IFC said its latest issuance of three-year benchmark bond was oversubscribed, generating a book order of $2.98 billion. This was IFC’s biggest dollar debt offering since 2016.

“The enthusiastic response from investors at the outset of 2018 is a testament to IFC’s pivotal position as the premier institution creating markets and opportunities in developing countries,” said Jingdong Hua, IFC vice president and treasurer.

“Thanks to IFC’s international triple A credit rating and our standing as a premier global issuer, this $2-billion global bond will unlock financing for business and help create jobs in some of the most challenging and poorest countries – including for climate-smart business and women entrepreneurs,” he ttsaid.

The three-year bond would yield 2.352 percent, 18.70 basis points higher than the US Treasury of the same tenure. IFC said central banks and other official institutions accounted for 52 percent of the orders, followed by banks at 22 percent. More than 60 percent of orders came from investors in the Americas.

Meanwhile, IFC was the sole investor in Banco de Oro’s first offshore green bond issue in December last year from which the country’s biggest lender raised $150 million.

This was also IFC’s first green bond investment in a financial institution in East Asia and the Pacific.

The pioneering green bond is seen to provide an alternative source of long-term green finance in the Philippines and contribute to the Philippines’ target of reducing carbon emission by 70 percent by 2030.

The funds would be used exclusively to finance climate-smart projects including renewable energy, green buildings and energy-efficient equipment.

IFC currently sees a $2 billion investment opportunity for green buildings in the Philippines which is driven by fast population growth and rapid urbanization.