IFC Launches Its First New Zealand Dollar-Denominated Global Kauri Bond
IFC, a member of the World Bank Group, today launched its first-ever New Zealand dollar Kauri bond, issuing a five-year NZ$300 million note to raise funds that will support IFC’s work to reduce poverty by strengthening the private sector in developing countries.
The notes, which have a final maturity of August 23, 2012, carry a coupon rate of 7.75% percent a year (payable semi-annually) and were priced today to yield 82 basis points over the benchmark New Zealand government bond.
A Kauri bond is a New Zealand dollar-denominated bond issued by a foreign issuer and can be sold to both domestic and international investors.
The proceeds of the issue were swapped into floating rate U.S. dollar funds and will be used to finance IFC’s operations of providing loans, equity, structured finance and risk management products, and advisory services to private enterprises in developing countries.
The issue, launched under IFC’s Australia/New Zealand dollar medium-term note program, was placed both locally and internationally among high-quality banks and fund managers. IFC achieved its objectives of reaching an untapped investor base and diversifying its currency funding basis.
“IFC is delighted with the uptake of the issue. We seek diversification opportunities to fund IFC’s growing work in client countries,” said IFC Deputy Treasurer John Borthwick. “We had seamless execution and a very welcome response form investors based in New Zealand.”
The joint lead managers are ANZ Institutional and Bank of New Zealand. Co-lead manager is TD Securities. The bonds will qualify as securities under the revised Reserve Bank of New Zealand Overnight Reverse Repo Facility as announced on July 17, 2007.
IFC’s funding activities focus on two key goals: raising and securing funds to meet IFC’s annual funding requirements as well as stimulating growth in emerging capital markets by issuing bonds in local currencies. For the fiscal year ending June 30, 2008, IFC has a planned borrowing program of up to US$5 billion equivalent. IFC’s long-term debt is rated triple-A by both Standard & Poor’s and Moody’s Investors Service.
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