IFC launches landmark Brazilian bond

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The International Finance Corporation, the World Bank’s private investment arm, on Wednesday launched a landmark Brazilian bond as it sought to boost growth and create jobs in the country.

The IFC bond, which is the first domestic debt offering in the country by a non-
Brazilian issuer, should pave the way for other foreign issuers and help develop local capital markets.

The R$200m ($115m) raised by the bond will be used to support Brazilian business in the private sector, including financial institutions, transportation companies, exporters, agribusinesses and industrial groups.

Orders for the bond, which carries a 11.96 per cent coupon and matures in January 2011, rose to about R$500m and was bought by 20 Brazilian investors, including pension and mutual funds.

Nina Shapiro, IFC treasurer, said: “The bond fits with the World Bank Group’s goal to support sustainable development of the private sector, which has proved to be an effective engine of growth and development by creating jobs and economic opportunities.”

Farida Khambata, IFC vice-president for Latin America, the Caribbean, Asia, the Middle East and North Africa, added: “This bond issue is part of the IFC’s broader strategy to deepen local capital markets in Brazil.”

The bond was rated
triple-A by Standard & Poor’s and Moody’s Investors Service. ABN Amro and Banco Itau, the Brazilian bank, managed the deal.

The IFC – which has issued bonds in China, Colombia, the Czech Republic, Greece, Hong Kong, Malaysia, Morocco, Peru, the Philippines, Poland and Singapore – has a global borrowing programme of $5bn this year.

It has a committed portfolio in Brazil totalling $1.6bn as of the end of June and has provided more than $8.7bn to support the development of almost 200 private companies in the country since its inception in 1956.

Its goal is to stimulate growth in emerging capital markets by issuing bonds in local currencies, which is then used to finance private sector investment and
mobilise capital in local
and international financial markets.

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