Washington, DC, October 22, 2021– IFC today issued a new 2.5-year short-term variable rate social bond (âFRNâ), raising $ 500 million to improve the lives of the most vulnerable in developing countries, including by strengthening the resilience of health systems to pandemics. This is the first day-to-day secure finance rate (âSOFRâ) FRN issued to the market to date.
The social SOFR FRN will benefit underserved populations in emerging and developing markets, supporting IFC’s continued response to the pandemic as well as its long-term strategy to build resilient health systems capable of better responding to future health crises.
âThis social bond issue comes at a very important time,â said Tomasz Telma, IFC’s senior director for manufacturing, agribusiness and services. âThe pandemic has taken its toll in developing countries and has made it very clear that we need to focus on creating a pandemic resilient health system that includes both private and public solutions. “
IFC has invested more than $ 2.4 billion for healthcare and health systems in emerging markets since the start of the pandemic. IFC’s strategy, implemented in partnership with the World Bank, includes expanding quality health care and strengthening collaboration between the public and private health sectors, promoting relevant innovations in health digital health and strengthening supply chains so that needed products reach healthcare providers and patients.
This issue is part of IFC’s Social Bond program, which gives investors the opportunity to support innovative programs that will have positive social impacts in developing countries while providing investors with a financial return on their investment – in this In this case, the return is variable and linked to the SOFR index.
Through the Social Bond program, IFC funds social projects that benefit women-owned businesses, inclusive business ventures, and projects that meet the criteria stipulated in the Social Bond Principles, which include: affordable basic infrastructure (eg drinking water, sewage, sanitation, transport, energy); access to essential services (eg health care, education and vocational training, finance and financial services); affordable housing; job creation, in particular through the potential effect of financing small and medium-sized enterprises and microfinance; food safety; and socioeconomic progress and empowerment.
IFC was the first issuer to launch a US dollar public benchmark social bond during the COVID-19 crisis. IFC’s largest social bond – a billion dollar social bond – was issued the same day the World Health Organization declared the coronavirus outbreak a global pandemic on March 11, 2020.
IFC’s social bond program was launched in March 2017 with a US $ 500 million global benchmark bond. With today’s issuance, IFC’s cumulative social bond issuance reaches $ 4.4 billion across 67 social bonds.
Summary conditions of obligations
Issuer: IFC (International Finance Corporation)
Emissions ratings: Aaa / AAA (stable / stable)
Format: Global SEC Exempt
Amount: US $ 500 million
Settlement: October 29, 2021
Deadline: April 3, 2024
Coupon: SOFR + 9bps
Listing: London Stock Exchange
Denominations: US $ 1,000 + US $ 1,000
Documents: Issuer’s Global Medium Term Note Program
Underwriters: BMO Capital Markets Corp., Wells Fargo Securities
Central banks / official institutions: 58%
Asset managers: 12%
Companies / Pension funds / Insurance companies: 9%
IFC, a member of the World Bank Group, is the world’s largest private sector-focused development institution in emerging markets. We work in over 100 countries, using our capital, expertise and influence to create markets and opportunities in developing countries. In FY2021, IFC committed a record $ 31.5 billion to private businesses and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information visit www.ifc.org.