IFC Launches Taino Bond in Dominican Republic, Marking First Local Placement by International Issuer
December 3, 2012—IFC launched a 390 million Dominican peso bond (approximately $10 million) to support the development of capital markets in the Dominican Republic and increase the availability of local-currency financing for private sector companies.
The IFC Taino Bond is the first domestic placement by an international triple-A rated issuer in the Dominican Republic. It is also the first IFC bond in Latin America and the Caribbean whose proceeds are directly linked to investments in the local private sector. Proceeds from the bond will be used to expand access to finance for micro, small, and medium enterprises and loans for low-income housing in the Dominican Republic.
The bond is the result of a three-year collaborative process among IFC, local government and regulatory authorities, and market participants. IFC will directly lend the bond proceeds to private sector companies. This creates access to local-currency finance for the private sector while providing a viable channel for domestic savings to be directed into productive long-term investments.
“Vibrant domestic capital markets are the foundation for shared prosperity and lasting growth,” said IFC Vice President and Treasurer Jingdong Hua. “Supporting the development of such markets is a priority for IFC, particularly in smaller economies where we can have greater impact by providing a model for other issuers and encouraging increased participation in the local markets.”
Ary Naïm, IFC Country Head for Haiti and the Dominican Republic, said: “The IFC Taino Bond supports the Dominican government’s efforts to strengthen the country’s domestic capital markets. It offers a high-quality investment alternative for institutional investors and makes available funds that can be put to work in the local economy, particularly in areas that are a priority for the country.”
IFC’s objectives in the Dominican Republic are fostering financial and economic inclusion, improving the country’s competitiveness, and promoting investments in cleaner and affordable energy generation. Since 1961, IFC has invested $782 million in the country’s private sector.
In Latin America and the Caribbean, IFC has issued local-currency bonds in Brazil, Colombia, and Peru. IFC issues bonds as part of its regular program of raising funds for private sector development, and to support the development of local capital markets in emerging economies. IFC bonds are rated triple-A by Moody’s Investors Service and Standard & Poor’s.
Advisors in the early stages of the transaction were BHD Valores and JP Morgan. The Dominican law firm OMG provided legal advice to IFC. Citi was lead manager and sole underwriter of the transaction.