IFC issued a record number and a record volume of green bonds in Financial Year 2018 – 32 green bonds for a total volume of $1.8 billion. In the eighth year since the launch of IFC’s Green Bond Program, cumulative issuance is $7.6 billion across 111 bonds in thirteen currencies.
At the start of FY18, IFC placed an inaugural 125 million New Zealand dollar Green Kauri bond – the equivalent of approximately $95 million – to support climate-smart investments. This was the first time that a green bond was launched in New Zealand. The 10-year fixed rate bond pays a 3.750% coupon and was primarily placed among local (59%) and Asia Pacific (38%) investors. The bond was well received by the market, opening up green and sustainable investing opportunities in New Zealand dollars.
Later in October, IFC issued a 5-year green bond that raised $1 billion for climates-smart investments, amid surging investor demand. This was IFC’s third $1 billion benchmark green bond, after being the first global institution ever to access this size in the market. Half an hour after order books opened, demand surged above $1 billion, with significant support from investors focused on socially responsible investments (SRI). Overnight, indications of interest grew in excess of $2.25 billion. The trade attracted a very high quality order book supported by strong interest from SRI accounts and was 2.6 times oversubscribed. Pricing-wise, the trade came with a spread of 11.8 basis points over Treasuries and marked the tightest pricing versus 5-year US Treasury Note in the sovereigns, supranational and agencies space since 2015.
IFC maintained a strong presence in the Japanese green retail market, placing 11 Uridashi trades in NZD, TRY, MXN, ZAR currencies for a total amount of $20 million equivalent. On top of that, IFC entered a new market – the Italian retail market – in October 2017 with debut issuances of three green bonds in BRL, TRY and USD in the course of a few months, totaling $27 million equivalent.
Throughout FY 2018, IFC enjoyed a solid flow of green private placement inquiries, selling in excess of $500 million in medium-term notes and club deals. Strong demand IFC was seen in Swedish Krona, having issued SEK1.3 billion of bonds to a range of investors.
Finally, at the close of the financial year IFC issued the first internationally rated triple-A Philippines peso-denominated green bond – the equivalent of approximately $90 million with a 15-year maturity – to support the local capital market and renewable energy. Adding pesos as a new green bond currency supports IFC’s goal to strengthen the important green asset class. On 30th June 2018, IFC’s outstanding green bonds amounted to around $4 billion.
Published in April 2019