IFC issues Namib bond to support local capital market development in Namibia
AA – IFC, a member of the World Bank Group, has launched the first bond by a non-resident issuer in the Namibian capital markets, raising 180 million Namibia dollars—equivalent to $12 million—for private sector development in the country.
The five year bond is named “Namib” after the world’s oldest desert. Namib means “vast space” in the Nama language and gave rise to the name of the country. The bond is part of a medium term note program registered with the Namibian Stock Exchange that allows IFC to issue up to 10 billion Namibia dollars, or approximately $650 million, in bonds in the domestic market.
IFC will invest the proceeds of the bond to support private sector development in Namibia. The bond yield is 9.812 percent per annum.
“Developing Namibia’s capital markets will be critical for long-term economic development, and especially for the expansion of the infrastructure and banking sectors,” said I. W. Shiimi, Bank of Namibia Governor. “We hope that other international and domestic issuers will follow IFC and connect savings to Namibia’s private sector investment needs.”
The bond is issued under IFC’s Pan-African Domestic Medium Term Note Program, which was launched in May 2012 to support capital market development in the region. Nine countries are part of the program, including Rwanda and Zambia where IFC has already issued local currency bonds.
IFC supports local capital market development in Africa by working with governments, regulators and market authorities to put in place frameworks that encourage market entry by domestic and international issuers. IFC also supports African companies looking to access capital markets.
More recently, IFC launched a new capacity building program for African capital market regulators and practitioners. The program is a partnership with the Milken Institute and George Washington University and will create a network of experts and advocates to support the region’s capital markets.
“Deep, vibrant capital markets create access to long-term, local-currency finance for the private companies so they can get tailor-made financing for growth and expansion,” said Jingdong Hua, IFC Vice President and Treasurer. “The IFC Namib bond is an integral part of IFC’s strategy to support Africa’s capital market development and create access to finance for the region’s private sector.”
Standard Bank and IJG Securities (Pty) Ltd are lead managers for the bond issuance. IJG Securities is also the sponsoring broker on the transaction, while Standard Bank and Transfer Secretaries (Pty) Ltd are fiscal agents.
IFC issues local currency-denominated bonds in emerging market currencies as part of its regular program of raising funds for private sector development, and to support the development of domestic capital markets. In many cases IFC is the first, or among the first, nonresident issuers in a domestic market. IFC bonds are rated triple-A by Moody’s Investors Service and Standard & Poor’s.
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