IDB Invest, which is part of the Inter-American Development Bank (IDB) and works with private companies, has raised $750 million by selling a bond under its Global Debt Program. A bond is basically a loan investors give to an organization, and in return, they get interest over time. This bond will last for 2.5 years, and it pays 3.625 percent interest every six months. The price of the bond was set at a rate that is just a bit higher than the 3-year US government bond, meaning it’s slightly riskier but offers better returns.
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Strong Investor Interest
The bond was well-received by investors, attracting over $2.3 billion in orders, more than three times the amount initially offered. This strong demand allowed IDB Invest to finalize the issuance at $750 million and slightly improve the final pricing by lowering it by four basis points. Joint lead managers for the bond were BNP Paribas, Deutsche Bank, HSBC, and Scotiabank, highlighting the bond’s credibility in the global financial market.
Focus on High-Quality Demand
Much of the demand came from high-quality investors, with 79% of the allocation going to central banks and official institutions, demonstrating strong confidence in IDB Invest’s financial strength and creditworthiness. The bond was issued at a price of SOFR mid-swaps plus 35 basis points, giving a yield of 3.678%, which is 18.5 basis points higher than the 3-year US Treasury bond.
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Part of a Broader Strategy
This bond marks IDB Invest’s fourth public bond issuance in 2024. Earlier in the year, the organization raised $1 billion with a 5-year bond, sold a 2.5 billion Mexican peso bond in March, and issued a record AUD 600 million green bond in May. Together, these bond sales have helped IDB Invest continue to expand its portfolio and enhance its impact in the region.
Support for Regional Development
Proceeds from this bond will be used to finance private sector projects that support infrastructure improvements, job creation, and economic growth in Latin America and the Caribbean. IDB Invest’s mission is to promote sustainable development by partnering with private companies across the region to foster social and environmental progress
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IDB Invest’s Chief Financial Officer, Orlando Ferreira, expressed his satisfaction with the bond sale, saying, “We’re happy to see such strong support from investors. This sale comes after a major decision by our board in March to increase our available funds by $3.5 billion. The success of this bond sale shows that investors have confidence in IDB Invest and our commitment to making a big impact in Latin America and the Caribbean by supporting private sector development.”
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