The notes, which have a final maturity of May 2, 2011, carry a coupon rate of 5.125 percent per year (payable semi-annually). In its launching, the bonds were priced to yield 29 basis points (bps) 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, JP Morgan, Mizuho, Nomura and UBS.
This is the seventh successive year that IFC launched a global US dollar benchmark issue.
For the fiscal year 2006 (ending June 30), IFC plans a borrowing program of up to $2 billion equivalent. The long-term debt, rated by both Standard & Poor’s and Moody’s Investors Service, is AAA.
The issue was oversubscribed and placed with over 50 high-quality accounts globally. Asia accounted for 35 percent of the placement; North America, for 30 percent; and Europe, the Middle East, and Africa for 35 percent.
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 said that investors clearly appreciate the care the IFC takes in marketing, executing and supporting annual benchmark issues.
The annual US dollar global bond offering represents a key element of its 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.
The IFC is the private sector arm of the World Bank. It coordinates activities with the institutions of the World Bank Group but is legally and financially independent. Its 178 member-countries provide its share capital and collectively determine its policies.
Since 1956, it has committed more than $49 billion of its funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. Its worldwide committed portfolio was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.