The International Finance Corporation (IFC) announced on June 24 it has issued a $2 billion global bond to finance private sector projects in emerging markets. The goal is to support job creation, fight poverty, and encourage sustainable economic growth in these countries.

The bond, arranged by BofA Securities, Citi, JP Morgan, and TD Securities, carries a five-year maturity and will mature on July 2, 2030. It offers a semi-annual coupon of 3.875%. The offering received strong interest from investors, with total orders reaching over $3.8 billion, nearly twice the amount issued.

The final pricing was set at 7 basis points above U.S. Treasury bonds, marking the tightest spread ever achieved by the IFC for a five-year bond. Compared to the SOFR mid-swap rate, the spread came to +41 basis points, a notable result given the current global geopolitical tensions.

In terms of geographic distribution, investors from the Asia-Pacific region led the demand with 43%, followed by the Americas at 30%, and Europe, the Middle East, and Africa at 27%. By investor type, banks accounted for 48% of subscriptions, central banks and official institutions made up 43%, while asset managers represented 9%.

The lead managers praised the transaction's execution and the IFC's strong credit appeal despite a challenging market backdrop.

“Primary market conditions were favorable despite the challenging geopolitical backdrop and IFC achieved its tightest pricing versus US Treasuries in five years. The quality and diversity within the order book are a testament to the global appeal of the IFC credit and mission,” said Ebba Wexler, Head of SSA Debt Capital Markets at Citi.

Since 2000, the IFC has issued annual dollar-denominated benchmark bonds, complemented by local currency bonds and thematic bonds, including climate and gender-focused offerings. All IFC bonds hold AAA ratings from both Standard & Poor’s and Moody’s, providing maximum security for investors.

In 2024, the IFC reported a record $56 billion committed to emerging markets. This latest bond issuance strengthens its ability to mobilize private capital for inclusive and sustainable development across these regions.