More than 40 institutional investors across the world, including central banks, official institutions, pension funds, and fund managers, have invested in the IFC’s $500m Social Bond program.

The three-year global benchmark bond was 1.4 times oversubscribed. 

Maturing in March 2020, the bond was priced at 99.942% with a coupon of 1.75%.

The IFC's Social Bond Program was launched to expand financing for projects that benefit women-owned enterprises and low-income communities in emerging markets.

IFC said that the program will provide finance to companies that buy from smallholder farmers, provide utilities for low-income households, offer affordable health services, education, or housing to low-income people. 

The funds will also be used to support financial institutions that lend to women-owned enterprises. 

The investors in the issue included Affirmative Investment Management, the California State Teachers’ Retirement System, Calvert Research and Management, the International Fund for Agricultural Development, the Praxis Impact Bond Fund, QBE Group, the United Nations Entity for Gender Equality and the Empowerment of Women and the United Nations Development Programme.

Gary Brader, Group CEO for QBE, said: “We are delighted to participate in the IFC Social Bond program, which can profitably and sustainably support access to finance for women entrepreneurs, as well as low-income communities in emerging markets.” 

“It is an excellent example of the blending of a very high-quality issuer, an appropriate return to the investor, and the overlay of additional social objectives being pursued. This fits very nicely with our Premiums4Good initiative, whereby we undertake to invest a portion of selected customer premiums into assets which are socially or environmentally beneficial,” he said.

The size of the issuance helps deepen the market for a new but rapidly growing category of sustainability bonds.
IFC established the Social Bond Program to meet investor demand for regular benchmark issuance by merging two existing socially responsible bond products—the Banking on Women Bond Program and the Inclusive Business Bond Program. Those two programs have raised $268m and $296m respectively since 2013. 

“IFC is committed to achieving more efficient and self-sustaining financing in emerging markets through the broader use of innovative capital-markets tools,” said Jingdong Hua, IFC’s Vice President for Treasury and Syndications. 

“Our social bond creates an attractive alternative for investors seeking triple-rated impact-investment products. We will continue to bring innovation and transparency to the Environment, Social and Governance bond market, unlocking additional funding for development,” he said.