IFC’s largest-ever social bond raises $2bn, rated as “excellent” by Sustainable Fitch

19 / 01 / 2025

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The International Finance Corporation (IFC)’s largest-ever social bond issuance, raising $2 billion with an $11 billion order book, received an “excellent” rating from Sustainable Fitch.

The IFC, a member of the World Bank Group, issued the three-year social bond to support low-income communities in emerging markets.

The transaction represents IFC’s largest ever social bond, and the largest US dollar denominated social bond issued by a supranational.

The order book reached a total size of $11 billion, IFC’s largest ever order book for a single bond issuance. It follows a 1 billion Australian dollar denominated social bond issued by the corporation last week.

Announced on Monday, the order book grew steadily during the marketing process and continued to do so throughout the bookbuild.

“In an era marked by rising inequality and poverty, social bonds have emerged as a crucial tool for directing investments to essential projects in emerging markets,” said John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization. “This bond will unlock additional funding for vulnerable communities and underserved groups in emerging markets in areas such as health, education, and food security.”

The social bond is issued under an updated social bond framework, which IFC published last week. The social bond framework received a rating of “excellent” from second opinion provider Sustainable Fitch, who confirmed the framework’s full alignment with the International Capital Market’s Social Bond Principles.

IFC is one of the largest global issuers of social bonds and the only World Bank Group entity that issues social bonds.

Barclays, Goldman Sachs, Nomura, and SEB acted as joint lead managers for the transaction.

“With this new $2 billion three-year social bond transaction (the first under the new framework), the International Finance Corporation has once again demonstrated its commitment to the US dollar market and its loyal investor base. Despite very congested markets IFC was rewarded with its largest orderbook ever and over five times covered for the deal. The sheer volume and quality of the orderbook underscores IFC’s position as a US dollar market favorite and has enabled IFC to achieve the largest spread tightening seen in the market this year! Congratulations on this fantastic result,” said Spencer Dove, Managing Director, Head of DCM SSA at Nomura.

Proceeds from IFC’s social bonds fund a diverse range of social projects which include: affordable basic infrastructure (e.g. clean drinking water, sewers, sanitation, transport, energy); access to essential services; affordable housing; women-owned small and medium sized businesses who lack access to finance; and companies that incorporate people at the “base of the economic pyramid” into their value chain; as well as food security.

IFC is a frequent issuer of social bonds in public and private markets, in various currencies and tenors.