Washington, D.C., January 15, 2025 – The International Finance Corporation (IFC), a World Bank Group entity, has issued a landmark $2 billion three-year social bond to support low-income communities across emerging markets. Unveiled on January 15, 2025, this transaction marks the IFC’s largest-ever social bond and the biggest US dollar-denominated social bond from a supranational issuer. The bond attracted an unprecedented $11 billion orderbook, reflecting robust global investor confidence despite a crowded primary market.
The proceeds will finance critical projects in health, education, food security, and affordable infrastructure, targeting vulnerable populations in developing economies. This issuance follows a 1 billion Australian dollar social bond launched the previous week, underscoring IFC’s growing reliance on such instruments to channel capital where it is most needed. The orderbook, which swelled steadily during marketing and bookbuilding, highlights the depth of demand for IFC’s credit, with orders from banks (51%), central banks and official institutions (30%), and asset managers (19%).
John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization, emphasized the bond’s significance: “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.” The bond aligns with an updated social bond framework, released last week, which earned an “excellent” rating from Sustainable Fitch for its adherence to the International Capital Market’s Social Bond Principles.
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Barclays, Goldman Sachs, Nomura, and SEB served as joint lead managers, navigating a congested market to secure a minimal new issue concession. Alex Paterson, Managing Director and Head of SSA DCM at Barclays, noted, “Congratulations to the IFC team on achieving great success with their second US dollar fixed rate benchmark outing of the fiscal year. The high-quality orderbook, in excess of $11 billion, and limited price sensitivity of the global investor base, is testament to the depth of demand for the IFC credit. Despite a busy primary market, IFC achieved an upsized transaction at a minimal new issue concession. Barclays are honored to have supported this new issue.”
Goldman Sachs’ Dorothee Amar, Managing Director and Co-Head of SSA, added, “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.”
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Nomura’s Spencer Dove, Managing Director and Head of DCM SSA, said, “With this new $2 billion three-year social bond transaction (the first under the new framework), the International Finance Corporation has once again demonstrated its commitment to the US dollar market and its loyal investor base. Despite very congested markets IFC was rewarded with its largest orderbook ever and over five times covered for the deal. The sheer volume and quality of the orderbook underscores IFC’s position as a US dollar market favorite and has enabled IFC to achieve the largest spread tightening seen in the market this year! Congratulations on this fantastic result.”
Anna Sjulander, Head of SSA DCM at SEB, remarked, “Congratulations to IFC on this fantastic outcome. In a crowded market the response from global investors is truly an endorsement of not only their standing in capital markets but also of their leadership in the development of the social bond market. SEB is delighted to have been part of the team on this transaction.”
Geographically, demand was led by Europe, the Middle East, and Africa (60%), followed by the Americas (24%) and Asia Pacific (16%). As the only World Bank Group entity issuing social bonds, IFC continues to pioneer this market, funding initiatives like women-owned SMEs, affordable housing, and companies integrating base-of-the-pyramid workers into their supply chains.
