AMID COVID-19 CRISIS, IFC SOCIAL BONDS—AWARDS, EXPANDED ISSUANCE, MARKET GUIDANCE

IFC and Environmental Finance Magazine

In their 2020 Bond Awards, Environmental Finance Magazine has recognized IFC’s Social Bonds Program for an Initiative of the Year. Since 2017, IFC’s social bonds have financed projects helping underserved communities in developing countries, across more than 100 projects in health care, education, agribusiness, and other sectors. The award recognized IFC’s Social Impact Notes, a retail notes program launched in July 2019 in collaboration with the Haitian diaspora in Miami. The debut trade, which raised $2.94 million, will focus on social projects that IFC is undertaking in Haiti.

IFC Investors Relations head Denise Odaro was also named Personality of the Year for her contributions to developing the green, social and sustainability bond market.

IFC’s social bonds program has expanded significantly amid the coronavirus crisis. Last month IFC issued its largest ever social bond, a $1 billion bond with proceeds going toward projects that benefit underserved communities in developing countries, including in countries affected by the COVID-19 outbreak. IFC was the first supra-national issuer to launch a social/sustainability bond since the pandemic was declared. This has been followed by issuances in Swedish Kronor and AUD Kangaroo bond.

IFC has also published with the International Capital Market Association an illustrative use of proceeds case study of social bonds. The document aims to provide an illustrative reference by which issuers and bond market participants can evaluate the financing objectives of a Social or Sustainability Bond in light of the current coronavirus epidemic and its global socio-economic impact.

Social bonds finance projects that directly aim to address or mitigate a specific social issue and/or seek to achieve positive social outcomes. As the pandemic is causing far-reaching economic disruption in emerging markets and developing countries, the social bond market is one avenue through which the public and private sectors could access the critical capital required to meet healthcare needs, restore economic stability and preserve jobs. The guide is in response to the efforts being made within the capital markets to mitigate the negative health and socio-economic impacts of the coronavirus.

Denise Odaro joined ICMA in this podcast to talk about the guide and you can listen here: https://icma.podbean.com/e/social-bonds-on-the-rise/

Adapted from Environmental Finance Magazine’s post