IFC issues J$ bond on international market
A bond has been issued on the international capital markets denominated in Jamaican dollar for the first time ever. The bond was issued by the International Finance Corporation (IFC), the private sector arm of the World Bank Group which said the issuance now paves the way for more borrowers to tap the Jamaican dollar market.
The five-year bond raised $2.36 billion — equivalent to US$15.26 million — and pays a coupon of 7.45 per cent.
The involvement of a Triple A rated issuer such as IFC in introducing a Jamaican dollar denominated bond to the international capital markets will help create a benchmark for future Jamaican dollar issuances. The issuance comes as IFC engages with the Jamaican Government to find ways to support the country’s growth and provides offshore investors with the ability to gain exposure to the Jamaican currency.
“Liquid and well-developed capital markets are essential for the flow of financing from investors to borrowers,” said Ronke-Amoni Ogunsulire, IFC’s regional manager for the Caribbean. “The issuance will provide useful market information to investors who are interested in local currency financing.”
Interest in the bond came from investors based in the UK and Europe. The bond is listed on the London Stock Exchange and sold as a private placement to investors such as FIM Partners and Record EM Sustainable Finance Fund among others.
IFC issues local currency bonds to develop local capital markets and introduce new investors, particularly international investors, to these markets. In addition, IFC has been an important issuer of green and social bonds and has supported clients in accessing the capital markets as an anchor investor in new issuances in developing countries.
To date, IFC has issued bonds in 48 currencies. A number of these are emerging-market currencies such as in Azerbaijan manat, Uzbek som and Zambian kwacha. IFC has often been among the first non-domestic issuers to borrow in these markets.