World Bank Group member the International Finance Corporation (IFC) has issued a 193.2-million Zambian kwacha bond – equivalent to about $10-million – to support the development of the country’s domestic capital markets and increase access to local currency finance.
The five-year, amortising “Zambezi” bond – which was oversubscribed – was issued as a floating rate note, paying a coupon based on the 182-day Zambian Treasury bill yield minus 50 basis points.
Proceeds will support the IFC’s local currency investment programme in Zambia.
This is the IFC’s second kwacha-denominated bond after it placed the first bond issued by a nonresident issuer in Zambia’s domestic capital markets in 2013.
The issuance is the corporation’s first floating rate note in Zambian kwacha and forms part of the IFC’s registered medium-term note programme in Zambia, as well as its Pan-African Domestic Medium-Term Note Program.
The IFC will be exploring additional issuances in the currency in the future to raise funding for its investment projects in the country.
“Deep and liquid domestic capital markets are essential to expanding access to much-needed local currency finance for key sectors in the economy. Scaling up local currency financing is a key priority for the IFC and we’re delighted to be back in the Zambian market,” says IFC Treasury and Mobilisation treasurer and VP John Gandolfo.
Absa Bank Zambia was the lead arranger and First National Bank the co-arranger for this issuance.