IFC issued a Benchmark 5-Year Social Bond, raising 500 million Canadian dollars for sustainable investments benefiting underserved communities in emerging markets, including women entrepreneurs and low-income people in need of access to healthcare and essential infrastructure.
The deal attracted strong, diversified investor interest and it is IFC’s inaugural transaction in the CAD market under its Social Bond framework. The last transaction denominated in Canadian Dollars issued by the IFC was a CAD 500 million conventional bond issued in September 2020.
John Gandolfo, IFC Vice President and Treasurer said: “I’m delighted by IFC’s first trade in the public markets of the new calendar year with this 500 million Canadian dollar Social Bond. It was an opportune time to issue as market conditions lined up. As we anticipated, there was solid demand from investors especially in light of the social theme. It’s also great to see the investor diversification in the CAD market.”
Canadian accounts dominated the orderbook, taking 55% of the final allocation, followed by Asia (35%), Europe (7%), and Americas ex-Canada (3%) investors. In terms of investor type, distribution was fairly balanced with Central Banks & Official Institutions leading the way taking 42% of the final allocation, followed by Banks (32%) and Asset Managers (17%), Insurance and Pension Funds (8%) and Others (1%).
“IFC emphatically returns to Canadian Dollar markets with a first-ever Social Bond offering. Investor engagement surrounding women-owned and inclusive businesses resonated particularly among Canadian investors, with half the deal placed into domestic accounts, while also drawing strong international support. Congratulations to the IFC team on a fantastic result!”, said Sean Hayes, Head of US Syndicate & Credit Sales, BMO Capital Markets.
“Congratulations to the IFC on a fantastic result in bringing its first Canadian issuance to market under its rigorous Social Bond format. The strong response elicited from the Canadian investor base demonstrates the interest of the local investor community for socially impactful projects, including those that benefit women-owned enterprises and inclusive business, and we commend the IFC on meeting those investment needs”, said Cesare Roselli, Global Head of SSA (Sovereign, Supranational, and Agency) Origination at Scotiabank.
“IFC has kick-started 2022 with a successful return to the Maple market by strategically seizing the right issuance window amidst a constructive market backdrop. Opting for a Social-themed bond added to the success of the transaction, resulting in a high-quality orderbook and simultaneously reflecting the strong reception of IFC’s credit quality. IFC’s commitment to the Maple market has been further reinforced with this transaction and TD are delighted to have been involved”, said Paul Eustace, Managing Director, Head of EMEA Syndicate at TD Securities.
IFC’s Social Bond Program, launched in 2017, offers bond investors an opportunity to allocate investments to the achievement of certain SDGs, to achieve positive social outcomes without any additional credit risk than that of IFC as a triple-A rated issuer. Proceeds from the bonds go towards financing select projects from IFC’s Banking on Women and Inclusive Business programs, which benefit under-served populations in emerging markets. Through the program, IFC finances social projects that are stipulated in the Social Bond Principles which include: affordable basic infrastructure (e.g. clean drinking water, sewers, sanitation, transport, energy); access to essential services (e.g. education and vocational training, healthcare, financing and financial services); affordable housing; employment generation including through the potential effect of SME financing and microfinance including for women entrepreneurs; food security; and socioeconomic advancement and empowerment.
IFC is a frequent issuer of social bonds in public and private markets, in various currencies and tenors. The Social Bond Program aligns with the Social Bond Principles published by the International Capital Market Association (ICMA).
IFC was the first issuer to launch a U.S. dollar public benchmark social bond during the COVID-19 crisis. IFC’s largest social bond – a $1 billion-dollar social bond – was issued on the same day that the World Health Organization declared the coronavirus outbreak a global pandemic on March 11, 2020.
As of 31st December 2021, IFC has issued 70 social bonds totaling $4.45 billion in 11 currencies.
IFC plays a leadership role in developing guidelines and procedures for the market and the burgeoning social bond market. In 2020, IFC was elected the Chair of the Executive Committee of The Green, Social and Sustainability-Linked Bond Principles. This was a culmination of IFC’s role chairing the Social Bond Working Group since its founding in 2016.
IFC Social Bond Terms
| Issuer: | International Finance Corporation (IFC) |
| Issuer rating: | Aaa/AAA (Moody’s/S&P) |
| Amount: | CAD 500 million |
| Settlement date: | January 28, 2022 |
| Coupon: | 1.850% |
| Coupon payment dates: | Semi-annually on each July 28th and January 28th up to and including the Maturity Date, commencing July 28th 2022 |
| Maturity date: | January 28, 2027 |
| Issue price: | 99.914% |
| Denominations: | CAD 1,000 + CAD 1,000 |
| ISIN: | CA45950KCY43 |
| Listing: | Luxembourg Stock Exchange’s Regulated Market |
| Joint lead managers: | BMO Capital Markets Corp., The Bank of Nova Scotia, London Branch, The Toronto-Dominion Bank |
