IFC Issues Largest Hong Kong Dollar Bond and First Social Bond in the Currency by a Supranational

Washington, D.C., May 1 — International Finance Corporation, a member of the World Bank Group, issued its inaugural benchmark public bond denominated in Hong Kong dollars (HKD). Supported by a robust order book, the three-year social bond raised $5 billion Hong Kong dollars (equivalent to approximately 650 million US dollars), the largest issuance size denominated in the currency by a supranational.

The transaction marks the first Hong Kong dollar denominated social bond issued in a public format by a supranational. The bond, which was settled through the Central Moneymarkets Unit, was oversubscribed with orders exceeding the issue size by more than one time. Interest came from local investors as well as other institutional investors across the Asia Pacific region.

“Social bonds are an important instrument for channeling investments into essential projects in emerging markets,” said Flora Chao, Global Head of Funding at IFC. “The transaction underscores our commitment to broadening our funding sources and engaging with a more diversified pool of investors. It also aligns with our long-term strategy of deepening our public presence in a wide range of currencies”

The social bond was issued under an updated social bond framework, which IFC published in January. The social bond framework received a rating of “excellent” from second opinion provider Sustainable Fitch, who confirmed the framework’s full alignment with the International Capital Market’s Social Bond Principles.

The Bank of China (Hong Kong) Limited, HSBC and Standard Chartered were the joint lead managers for the transaction.

“We extend our congratulations to IFC on the exceptional success with its inaugural Hong Kong dollar and social bond issuance. The sheer size of the order book and depth of high-quality orders are supported by bank treasuries and other real money investors across the HKD market. The strong investor response and pricing outcome stand as a testament to IFC’s robust credit quality and market’s recognition of its social commitment,” said Wang Huabin, Deputy Chief Executive of Bank of China (Hong Kong).

“The success of IFC’s inaugural wonton bond highlights the strength of the IFC credit and investor belief in their recently updated social bond framework. The significantly oversubscribed orderbooks demonstrate the depth of investor demand for this transaction from a broad range of Asian Investors and HSBC is delighted to have been able to act as a joint lead manager,” Asif Sherani, Head of Public Sector DCM at HSBC.

"Congratulations to the IFC team on the successful issuance of the world’s first social wonton bond, which also represents the largest issuance of wonton bonds to date by a supranational. This milestone transaction highlights IFC’s commitment to social issues and expands its investor base into the HKD bond market. The new social wonton bond was priced against the HIBOR mid-swap, enhancing pricing transparency and simplifying hedging for issuers. Standard Chartered is honored to have supported this significant transaction, which showcased the depth of Hong Kong's local currency bond market and strengthened Hong Kong’s status as an international financial center,” said David Yim, Head of Capital Markets, Greater China & North Asia at Standard Chartered Bank.

Proceeds from IFC’s social bonds fund a diverse range of social projects which include: affordable basic infrastructure (e.g. clean drinking water, sewers, sanitation, transport, energy); access to essential services; affordable housing; women-owned small and medium sized businesses who lack access to finance; and companies that incorporate people at the "base of the economic pyramid" into their value chain; as well as food security.

IFC is one of the largest global issuers of social bonds and the only World Bank Group entity that issues social bonds.

IFC Social Bond Terms:

Distribution Statistics:

Type:

Bank Treasury: 89%

Asset/Fund Managers/Corporates: 6%

Trading/Securities: 5%

Geography:

Hong Kong: 98%

Asia (Ex Hong Kong): 2%