IFC

This week’s funding scorecard looks at the progress supranationals have made in their funding programmes during a first quarter wracked by volatility.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, March 16. The source for secondary trading levels is ICE Data Services.

A vicious move in swap spreads left investors in IFC’s $1bn social bond with one of the lowest SSA spreads to US Treasuries ever on Wednesday, and a subsequent reversal has left investors wincing. Some questioned the strategy and timing of the trade, but most simply thought that investors were the victim of circumstance.

This week, it was the best of times, it was the worst of times – and despite volatility caused by the spread of the Covid-19, a trickle of MTN issuance has managed to slip through into the market.

Rating: Aaa/AAA

The public sector bond market pipeline is likely to remain sparsely populated as coronavirus pandemic volatility engulfs markets. But SSAs are happy to sit on the sidelines and wait for better market conditions.

International Finance Corporation defied volatility to achieve an impressive result in the dollar public sector bond market on Wednesday as it managed to bring in the spread by 4bp to price through the European Investment Bank.

A window for Kangaroo issuance opened this week, as a positive move in the Australian dollar/euro basis swap helped rouse a slumbering market that had not seen a deal for a fortnight. In spite of unstable conditions, SSAs entered the market on Monday and Tuesday, with a trio of regular borrowers tapping six lines for a combined A$575m ($364m).

Indonesia's OCBC NISP raised Rph2.75tr ($191m) from International Finance Corp through privately-placed sustainable bond transactions, split between a gender bond and a green bond.

South Africa’s Standard Bank has issued a $200m green bond, which was bought by the International Finance Corporation (IFC) in its entirety. The deal is the largest green bond ever issued by an African borrower.

MTN deal volumes year-to-date have slumped by nearly a third year on year, falling from $51.6bn in 2019 to $35bn this year. The fall has been particularly pronounced in core currency deals, with deals from other currencies forming a larger proportion of the market.

Two sterling public sector bond issues were announced on Tuesday, but aside from timing, the trades had little in common. The UK Debt Management Office printed £2.5bn at 50 years, while the International Finance Corp raised £350m with a seven year.