World Bank Group member the International Finance Corporation (IFC) announced today that it has raised $2 billion in a new social bond offering, with proceeds aimed at funding projects supporting low-income communities in emerging markets.
The offering was more than 5x oversubscribed, with an order book reaching $11 billion, the largest-ever for a single bond issuance by IFC, enabling the spread on the deal to be tightened from its initial price. The transaction also represented the largest-ever social bond for IFC, as well as the largest US dollar denominated social bond to be issued by a supranational.
The transaction also follows a 1 billion Australian dollar denominated social bond issued by IFC last week.
The new bond issuances follow the publication earlier this month by IFC of its updated social bond framework. IFC has a focus on vulnerable and underserved populations, such as women, low-income populations, underserved communities, refugees and displaced persons, and eligible use of proceeds for IFC social bonds under the new framework target project categories including affordable basic infrastructure such as clean drinking water, sewers, sanitation, transport, energy; access to essential services; affordable housing; employment generation; food security and sustainable food systems, and; socioeconomic advancement and empowerment, such as for women-owned small and medium sized businesses who lack access to finance.
John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization, said:
“In an era marked by rising inequality and poverty, social bonds have emerged as a crucial tool for directing investments to essential projects in emerging markets. This bond will unlock additional funding for vulnerable communities and underserved groups in emerging markets in areas such as health, education, and food security.”
Joint lead managers for the transaction included Barclays, Goldman Sachs, Nomura, and SEB.
Dorothee Amar, Managing Director, Co-Head of SSA, Goldman Sachs International, said:
“Congratulations to the IFC team on an incredibly successful transaction with today’s three-year US dollar benchmark! This marks IFC’s largest orderbook ever, comprising of very high-quality orders from central banks, official institutions, bank treasuries and other real money investors from across the globe. Tightening the spread by four basis points from initial price thoughts is a testament to IFC’s strong credit quality and global investor demand.”