Portfolio Securitization

The Financial Strategy unit within the Syndication and Resource Mobilization department is planning to execute a securitization transaction using a portion of IFC’s senior loans. The transaction is expected to be the first of an on-going program of securitizations.

In its efforts to securitize parts of its own portfolio IFC will use alternative forms of risk transfer such as:

• Credit derivatives
• Innovative financing techniques to identify, manage and transfer credit risk

The freed up capital from the securitization mechanism will be used to support new loans and will complement IFC’s B loan program.

The securitization market has grown rapidly over the last ten years and is now beginning to play an important role in a number of emerging markets. For several years, IFC has been helping our client financial institutions develop securitizations in their local markets through our Structured Finance unit in Treasury. The securitization program for IFC’s own loan portfolio dovetails with these efforts, as it seeks to use securitization for the Corporation’s own mobilization and credit risk transfer purposes.