IFC USD Social Bond 3-year Global (COVID-19 Response)
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In light of COVID-19 and the worldwide social and economic challenges of the coronavirus, social bonds are now front and center of the thematic bond market.
Demand is higher than ever as social bonds hold the keys to unlocking the benefits for under-served communities in the developing world.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector.
The proceeds of IFC’s Social Bonds support vulnerable communities and help people gain access to essential services, including healthcare and microfinance as well as creating opportunities for women and small business owners.
IFC was the first issuer to bring a social bond to market after COVID-19 began to spread globally, pricing a USD 1 billion benchmark global bond – its largest ever social bond – on the same date that the World Health Organisation declared the virus a pandemic. Despite market volatility, the deal gathered exceptional investor interest of over USD 3.4 billion, demonstrating that investors are keenly interested in supporting social outcomes in this environment. Since its inaugural issuance in 2017, IFC has now raised a total of USD 3 billion through 30 social bonds across 10 currencies.
As coronavirus disrupts emerging markets/developing countries, social bonds can offer an avenue for public and private sectors to access vital capital for healthcare sustaining jobs, and economic recovery. Improving access to finance, technology and markets for women is a key focus for IFC, with proceeds of social bonds going to projects and lending that address barriers for participation by women in the economy. In many parts of the world, good-quality jobs and access to assets are out of reach for millions of women. Lack of safe and affordable transport, violence and disproportionate care responsibilities can restrict access to jobs and hinder prosperity. The disruptions of COVID-19 amplify many of these existing inequalities. For women entrepreneurs, access to finance is a strong enabler of success.
IFC has been a lamplighter in the sustainable bonds market through its legacy issuances as well as efforts to create best practices and market standards. Since 2016, IFC has chaired the Social Bond Working Group which governs updates to the Social Bond Principles.
In addition, with overwhelming interest about financing avenues for corporates during these difficult times, IFC published a Social Bonds Case study to illustrate
how issuers from various industries in the private sector can use social bonds to raise financing to combat the crisis. This additional guidance demonstrates that the Social Bonds Principles are immediately applicable to efforts addressing the COVID-19 pandemic.
IFC is proactively educating investors of the benefits of changing capital markets towards achieving positive social and environmental impact through these financial products. IFC is leading dialogue about frameworks and transparency about impact reporting to investors, including, with the support of the International Capital Market Association and private sector partners, as the new Chair of the Green, Social and Sustainability Bonds Steering Committee.