IFC Completes One of the First Emerging Market Debt Financing Packages Based on the SOFR Term



Washington, DC, December 22, 2021-In one of the first such transactions in emerging markets by a development finance institution or commercial bank, IFC issued debt financing based on the SOFR term. The $ 25 million debt facility will finance telecommunications infrastructure in Africa and will use the term SOFR (Guaranteed Overnight Funding Rate) to replace USD LIBOR as the benchmark rate for the variable rate dollar loan. Americans.

In December 2021, the IFC approved the SOFR term to replace LIBOR, the London interbank offered rate, to ensure a smooth transition for new offers in light of US regulator guidelines for all loans from January 1, 2022.

“IFC’s first SOFR term loan comes soon after the approval of the SOFR term by the Alternative Reference Rate Committee (ARRC), the IFC CME (Chicago Mercantile Exchange) license and approval from our senior management. Preparing in advance allowed us to be in the market quickly. Floating rate US dollar loans referencing the SOFR term are our new standard for hard currency lending in emerging markets. We look forward to completing many more such transactions around the world, ”said Tom Ceusters, IFC Director, Treasury Market Operations.

“IFC monitors market developments and works with financial sector partners, particularly with multilateral development banks and other development finance institutions, to monitor industry developments and develop best practices, including the mechanisms for new loans and legacy transitional transactions. We have now closed what we consider to be the first of many SOFR term loans to be executed in emerging markets, ”added Ceusters.

IFC has conducted a comprehensive analysis of the impact of the LIBOR transition on society from a lending, financing, accounting, operations, information technology and legal perspective and is fully prepared to act in the best interests of our customers.

About IFC

IFC, a member of the World Bank Group, is the world’s largest private sector-focused development institution in emerging markets. We work in over 100 countries, using our capital, expertise and influence to create markets and opportunities in developing countries. In FY2021, IFC committed a record $ 31.5 billion to private businesses and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information visit www.ifc.org.

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