Debt Securities
IFC supports the issuance of debt securities for firms that seek to access global capital markets and reach new investors. In more developed markets, IFC can mobilize institutional and impact investors for private placements of, for example, green, social and project bonds.
In less developed markets, IFC primarily links borrowers with local and regional financial institutions and international impact investors in plain vanilla private placements. We can also work with issuers to mobilize investors into other forms of debt securities structured as necessary to comply with local regulations, including diversified payment rights and non-convertible debentures.
How It Works
IFC helps issuers access capital markets with advisory services, including structuring of first-time green and social bonds, as well as direct investments as an anchor investor. In certain circumstances, we can also supplement our own investments with direct mobilization of third-party investors to provide a comprehensive private placement solution for issuers.
This solution may be most suitable for issuers who can rely on IFC for structuring and book building support without requiring the formal services of an arranger.
Benefits to Investors
- Unique fixed-income investment opportunities through IFC’s global borrower network
- Ability to join IFC in negotiating the terms of the debt securities and the issuance, both at the term sheet stage as well as final documentation
- Opportunity to support issuers’ first-time access to capital markets or first-time green and social bonds
Benefits to Borrowers
- Supports borrower “graduation” from fundraising via loans to fundraising via capital markets
- Provides access to IFC’s global debt securities structuring expertise, including in the green and social bonds space
- Leverages IFC’s broad global partner network to identify co-investors and secure their participation without the need for an arranger
B Bonds
IFC uses B Bonds to help clients access capital markets and mobilize private capital for high-impact projects. B Bonds attract institutional investors into IFC-originated transactions and complement existing mobilization products such as Debt Securities Syndications (DSS) and B Loans.
B Bonds offer syndications partners access to rated debt securities while enabling borrowers to secure longer-tenor financing. The product also creates new opportunities for thematic financing, including sustainability-linked finance, and supports broader efforts to deepen capital markets.
How it works
A B Bond is funded through the sale of securities in the capital markets, following the A/B Loan Structure. A special purpose vehicle (SPV) is established to serve as the sole B Lender and purchases all — or a portion — of IFC’s B Loan.
One or more bookrunners structure and place the B Bond, which is issued by the SPV to private investors. By retaining the A Loan on its own balance sheet, IFC shares project risk with investors.
Benefits to Investors
- Expands the pool of assets for investors seeking long-term financing opportunities.
- Benefits from IFC’s privileges and immunities, and its strong relationships with the client’s host country.
- Provides access to investors that prefer or are regulated to invest only in rated debt securities.
- Enables participation in thematic financing opportunities.
- Offers enhanced credibility through IFC’s due diligence and stamp of approval.
Benefits to Borrowers
- Expands access to innovative financing and a broader pool of investors via capital markets.
- Offers the potential for longer tenors and/or larger volumes than typically available in the traditional loan markets.
- Simplifies financing administration, with IFC acting as the lender of record.
- Brings the advantages of IFC’s environmental and social standards and oversight.