The International Finance Corporation (IFC), a World Bank group, and Daiwa Securities Group Inc, a Tokyo-based financial services group holding company, recently announced the details of a bond expected to be issued later this month and to raise USD 323 million. The bond is intended to “expand access to finance for poor- and low-income entrepreneurs in developing countries” [1]. The bond will be issued through IFC’s Global Medium-Term Note Program; arranged by Daiwa Securities Capital Markets Company Limited, a securities firm that operates under the holding group Daiwa Securities Group Inc; and distributed by Daiwa Securities Company Limited, also a firm that operates under Daiwa Securities Group Inc, to “Japanese retail and institutional investors” [1].
This is IFC’s second microfinance bond. In October 2009, FC announced its first plan to raise USD 300 million for microfinance services by issuing bonds to Japanese retail investors [2]. The bond it subsequently issued in November 2009 raised approximately JPY 25 billion (the equivalent of USD 296 million) [1]. In June 2010, Daiwa Securities Group Inc announced its intention to issue bonds to Japanese investors to support the European Bank for Reconstruction and Development (EBRD), a London-based international development finance institution that focuses on Eastern Europe and Central Asia [3].
By Lindsey Shaughnessy, Research Associate
About Daiwa Securities Group Inc: Daiwa Securities Group Inc, founded in 1999, is the Tokyo-based holding company of group financial services companies that operate in Asia, Europe, Oceania and the United States. As of June 31, 2010, Daiwa Securities Capital Markets Company Limited reported total assets of JPY 14.7 billion (the equivalent of USD 173 million).
About the International Finance Corporation (IFC): A member of the World Bank Group, the International Finance Corporation (IFC) offers loan and debt securities, equity investments, advisory services and technical assistance to alleviate poverty and promote open and competitive markets in developing countries. The IFC has 182 member countries that “collectively determine its policies, and approve investments.” In fiscal year 2009, IFC’s new investments totaled USD 14.5 billion.
Sources and Additional Resources:
[1] International Finance Corporation, “IFC, Daiwa Announce Second Bond to Support Microfinance in Emerging Markets”, September 1, 2010. http://www.ifc.org/IFCExt/pressroom/IFCPressRoom.nsf/0/98A1607893F00883852577910072CD37?OpenDocument
[2] MICROCAPITAL STORY: “IFC to Raise $300m in Bond Issue in Japan Market for Microfinance Programs”, October 28, 2009. https://www.microcapital.org/microcapitalorg-story-ifc-to-raise-300m-in-bond-issue-in-japan-market-for-microfinance-programs/
[3] MICROCAPITAL BRIEF: “Daiwa Securities Group to Issue Bonds in Japanese Market to Support Operations of European Bank for Reconstruction and Development”, June 8, 2010. https://www.microcapital.org/microcapital-brief-daiwa-securities-group-to-issue-bonds-in-japanese-market-to-support-operations-of-european-bank-for-reconstruction-and-development-ebrd/
MicroCapital’s Microfinance Universe profile: Daiwa Securities Group Inc
MicroCapital’s Microfinance Universe profile: International Finance Corporation (IFC)
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