On the 4th of March, the 1st Belgian SIB ( Social Impact Bond) structured and financed by BNP...
A landmark bond issue for IDA
Today the International Development Association (IDA), announced it had successfully placed its first-ever bond issue. BNP Paribas was one of four international banks that arranged the US$1.5 billion landmark transaction. Proceeds from the issue will be used to finance IDA’s poverty-reduction programmes. The World Bank Treasury manages IDA’s funding programme.
The IDA was set up in 1960 and helps the world’s poorest countries. It aims to reduce poverty by providing loans and grants for programmes that boost economic growth, reduce inequalities and improve people’s living conditions. It is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa, and is the single largest source of donor funds for basic social services in these countries.
The IDA bonds were placed with institutional investors around the world in only a few hours. The success reflected strong investor demand for a sustainable-investment opportunity that, in addition to carrying a high-quality credit rating, will have a positive impact on the lives of millions of people in poor countries.
Following the success of its inaugural bond, the IDA joins a small group of top-tier supranational issuers. It also benefits from the World Bank’s 70-year track record in global capital markets and reputation for innovation in connecting issuers and investors in order to further social and economic development.
a positive impact on the lives of millions of people in poor countries.
The World Bank and BNP Paribas
The IDA bond issue is only the latest transaction on which BNP Paribas teams have worked for the World Bank Group. The bank has assisted the World Bank on a number of capital-markets transactions in recent years: they include conventional bond issues as well as equity-linked, sustainable bond interest-rate products and sustainable bond fixed-rate notes.
The IDA transaction also reflects BNP Paribas’ commitment to sustainable finance and its aim to create a positive impact. As part of its 2020 Business Development Plan, the bank has strengthened this commitment, notably by adopting the United Nations’ 17 Sustainable Development Goals as a framework to guide its business activities. The IDA’s inaugural bond is fully in line with this commitment.Read IDA’s press release
Chairman of the Board of Directors of BNP Paribas
“With ethical impact investing now established as a key investor requirement, future IDA issuance is a game changer, as it will attract further investor demand. The financial sector has a key role to play in channelling private capital towards sustainable initiatives with a positive impact. These bonds support the broader, collective effort of achieving the UN’s Sustainable Development Goals, and they contribute to the IDA’s vitally important mission of ending extreme poverty and promoting shared prosperity. As a company that has integrated the Sustainable Development Goals into its corporate objectives, BNP Paribas is delighted to be involved with this historic transaction.”
Header Photo ©Hugh Sitton/Stocksy
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