The IFC has raised over $1 billion through its Collateral Loan (CLO), attracting private investment to support the economies of developing countries.

The World Bank's International Finance Corporation (IFC) has raised an additional $509 million through credit lending agreements (CLOs), bringing its cumulative total to over $1,000 billion, aiming to enhance its lending capacity and create jobs in developing countries.

June 15, 2569 at 20.00:XNUMX a.m. Bloomberg News reported that The World Bank is continuing to expand its fundraising through the bond market. The International Finance Corporation (IFC), a private sector arm of the World Bank, has surpassed $1,000 billion in cumulative fundraising through its credit-backed securities program, following a recent $509 million deal to support job creation and economic development in developing countries.

This transaction marks IFC's second Collateralized Loan Obligation (CLO) issuance in less than a year, following a similar transaction last year. It involved consolidating 62 dollar-denominated loans from borrowers in South America, the Middle East, North Africa, and Asia into multiple bond offerings for sale to investors.

A CLO (Credit Liaison Agreement) is a financial instrument that consolidates multiple loans and divides their risk into different tiers. This allows investors access to high-risk assets through instruments with higher credit ratings, while the transaction provider can reduce balance sheet risk and increase their capacity to extend new loans.

The IFC's latest deal comprises a $320 million Senior Tranche, which has been provisionally rated Aaa by Moody's Ratings, the highest level. Its yield is only 1.2% higher than the SOFR benchmark, down from a 1.3% spread in the initial transaction, reflecting increased investment demand and higher market confidence.

Kevin Njiraini, Director of Syndicated Finance and Funding at IFC. said This new transaction has clearly attracted more investor interest, resulting in lower fundraising costs compared to the initial transaction. This reflects the market's increasing familiarity and confidence in this investment style.

He stated that Funds obtained from securitization are crucial for attracting private capital into developing countries, improving the efficiency of the IFC balance sheet, and extending positive economic impacts to emerging markets, including economically vulnerable countries.

The transaction was supported by the UK Foreign and International Development Office, with Goldman Sachs acting as the transaction structurer and Bank of New York Mellon as the trustee and payment agent.

Analysts view the IFC deal as reflecting increasing interest in CLO products in emerging markets, which currently represent a small proportion compared to the global CLO market, valued at over $1.3 trillion.

Meanwhile, investor interest was also boosted by the outstanding yields of developing country bonds. In 2569, emerging market dollar-denominated bonds have already yielded 1.7%, outperforming U.S. government bonds and continuing from 2568, which yielded 11%, or roughly double the returns of U.S. government bonds and leveraged loans, according to Bloomberg.

refer : www.bloomberg.com

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