Newsletter IFC Funding, Issue 11, November 2018 A Vote of Confidence • 2018 was a historic year for the World Bank Group. Our shareholders endorsed a $13 billion paid-in capital increase for IBRD and IFC—including $7.5 billion for IBRD and $5.5 billion for IFC. For IFC, this capital increase will more than triple the cumulative paid-in capital that we have received since inception. IFC is leading the effort to mobilize private sector resources in support of the 2030 development agenda. A more significant role for the private sector is needed to deliver the development solutions required to achieve the SDGs. Given the fiscal constraints facing governments, private sector solutions need to be deployed at scale and private capital needs to be unlocked, particularly where public solutions alone have failed to make significant progress. FY18 Funding Highlights In FY18, IFC raised $14 billion totaling 389 trades across In the retail space, a total Uridashi volume of $1.4 28 currencies—a record for IFC. This was largely driven billion set a record for two consecutive years, by continued active issuances through reverse inquiries accounting for 10 per cent of overall issuance. IFC as well as through trades in Japanese Uridashi market. continued offering notes to US retail investors through Issuance of plain vanilla MTNs, mostly denominated in its Impact Note as well as Accelerated Return Note emerging market currencies, totaled over $2 billion. (ARN) retail programs. In October 2017, IFC came to the Italian retail market with structured green bonds. Public markets contributed to more than 30% of IFC’s funding in FY18. In January 2018, IFC issued a 3-year Activity in Floating Rate Notes remained relatively US$2 billion global benchmark bond at mid-swaps -1bps, subdued in FY18, continuing the trend from the equivalent to 18.7bps over US Treasuries, sold to investors previous year. from the Americas (63%), EMEA (26%), and Asia-Pacific IFC continued strong issuance in the green space, (11%). Earlier in the year, IFC issued a 5-year US$1 billion raising over $715 million through 30 green bonds, benchmark green bond, which was 2.6 times including in TRY and SEK currencies. As of FY18 end, oversubscribed. IFC has raised $7.6 billion through the issuance of In the Australian public market, IFC launched a new 5- 111 green bonds in 13 currencies. year line maturing in March 2023—our inaugural social IFC’s social bond issuance flourished particularly in bond in the Kangaroo market—raising AU$ 300 million in Japan. 11 out of 13 social bond transactions were sold March 2018. IFC also launched a new 15-year line into the Japanese market, including IFC’s first social maturing in August 2033, extending IFC’s Kangaroo curve. bond in a private placement format as well as 10 In the New Zealand market, IFC launched a 10-year green Uridashi transactions. As of FY18 end, IFC has raised bond earlier in FY18. The bond marked the first green $920 million through 16 social bonds and in 6 bond ever issued in New Zealand, raising NZ$ 125 million. currencies. GBP SEK Retail 1% 1% Local Currency 6% 389 $14 28 RUB 1% 2% currencies Other FY18 Borrowings bonds billion BRL 3% 7% Uridashi INR 10% 4% In FY18, IFC raised $14 billion across JPY USD Other Core 6% Public Public 28 currencies through 389 trades 46% 12% 32% TRY 8% FRN AUD 15% MTN 10% MXN 24% 11% BY CURRENCY BY MARKET Expanding Local Currency Debuts Other News » In August 2017, IFC issued a $15 million Nov 2018 note » IFC published its FY18 Green Bond Impact Report linked to Papua New Guinea Kina (PGK) and denominated in October 2018, which was presented by IFC’s in US dollars. The bond marks the first PGK-linker senior management at the WBG-IMF Annual issued ever. Meetings in Bali. » IFC issued the first-ever Uzbek Soum-denominated » In FY18, IFC won the MTN- transaction in the international markets in May 2018, i APAC Award and Global raising $10 million equivalent to expand lending for Capital Bond Awards for micro, small and medium enterprises in Uzbekistan. Most Innovative SSA MTN Issuer. Last month, we » In the last month of FY18, IFC issued a 15-year green were awarded the MTN-i bond in the Philippines—the first green bond Power Performer award denominated in Philippine pesos issued by a for IFC’s social bond multilateral development institution. Uridashis. » The 2019 IFC-Milken Institute Capital Markets Early FY19 Funding Highlights Program , a capacity building program developed » IFC issued its first sterling green bond (Dec 2023) at the by IFC Treasury, has started. After graduation, the very start of FY19, attracting strong investor demand fellows will be equipped with the skills needed to and raising £350 million pounds to fight climate change. strengthen their countries’ capital markets. Later in the summer, IFC issued a 7-year £500 million » IFC’s 2nd Global Debt Mobilization Conference on bond—IFC’s largest sterling bond issuance. Creating Investable Opportunities in Emerging » In July, IFC issued a five-year US$2 billion global Markets will take place in Madrid, April 2-4, 2019. benchmark bond priced at UST +15.25bps, which generated an order book of about $3.9 billion. People’s Corner » After a decade away, IFC returned to the Canadian dollar » Jingdong Hua, IFC Vice President and Treasurer, market in July with a rare 5-year C$500 million July will be leaving his position to become the World 2023 global bond. Bank’s Vice President and Treasurer, effective January 1, 2019. Since he joined IFC in May 2011, Creating Sustainable Markets Story he has led and grown our global team of capital For Women in India, Small Loans Have a Big Impact market professionals to deliver innovative products and solutions. We will miss him dearly, Microfinance institutions are important for an economy like but his transfer to the World Bank will be a good India’s, where more than 80% of people work in the opportunity to further our collaboration across the informal sector. Local banks are not typically an option for Group. these borrowers, mostly women in rural areas, because the fees are too high. » Andrew Cross, who was the Acting Director of Treasury Market Operations since early 2018, was Over the past decade, IFC has helped create a market for appointed the new Deputy Treasurer based in microfinance in India by providing advisory services and London to provide oversight of IFC’s Treasury investing $564 million in more than a dozen financial operations in London and Singapore. institutions. Together they represent nearly half of all micro-lending in the country– reaching up to 70 million » Tom Ceusters was appointed as the new Director people, directly and indirectly. of Treasury Market Operations based in In the village of Washington, DC. He is responsible for the Bahutera, Pramila management of IFC’s debt capital market activities, Devi was able to liquid assets pool and balance sheet hedges. open a small tea » IFC’s Funding team has seen several changes. store using the Flora Chao, the Global Head of Funding, relocated loans and nearly from Singapore to London. Kenichiro Shiozawa double her family’s finished his secondment with IFC and returned to monthly income. JBIC. His successor is Maki Yasui, who will manage She also joined a relations with Japanese investors from the Tokyo support group with office. Hiroyasu Hirano joined the Singapore office other borrowers. and Sophie Peeters is the new team member in → Read the full story Washington, DC, working on investor relations. www.ifc.org/investors IFC • 2121 Pennsylvania Avenue Bloomberg: IFC investors@ifc.org NW, Washington, DC, 20433 USA @ifc_investors