We provide clients with innovative fixed-income solutions, including structured finance, local currency financing, risk management products, and debt capital markets access.
Local-Currency Financing
When companies borrow in a different currency than the currency in which they generate revenue, they are exposed to currency risk. For example, if a company takes on debt in US dollars while generating revenues in the local currency of its country of operations, it will be exposed to future changes in the exchange rate. If the local currency depreciates against the US dollar, the company’s debt in local currency terms can increase dramatically and ultimately become unsustainable.
Where possible, IFC provides local currency financing to companies with local-currency revenues, to protect them against currency risk. At the same time, IFC aims to support the development of local capital markets to increase access to local currency financing to all borrowers in the market.
Since 2014, IFC has committed debt investments of nearly $32 billion equivalent in more than 70 local currencies across the globe. IFC offers a wide range of local currency products, from fixed and floating-rate loans to investments in debt securities, securitizations, as well as guarantees.
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Structured Finance
IFC uses a range of structured finance products to provide bespoke financing and risk transfer solutions to its clients.
Guarantees for Approved Exposures
Instead of providing direct financing to its clients, IFC can leverage its triple-A (AAA/Aaa) rating and provide unfunded guarantees to lenders or investors, ie. while the lender or investor provides the funding, IFC absorbs a portion, or all, of the credit risk of the pre-identified borrower under the guaranteed debt. Learn more.
Portfolio Guarantees
Portfolio guarantees are financial instruments provided by IFC to help financial institutions manage and mitigate credit risk across a portfolio of assets. Key products under this category include risk-sharing facilities and synthetic risk transfers. Learn more.
Securitization
Securitizations allow companies and financial institutions to leverage a portfolio of assets with predictable cashflows to source efficient, matched funding from capital markets and/or transfer credit risk to investors and relieve capital that can be redeployed into more lending.
IFC invests in true-sale and synthetic securitizations and can provide credit enhancement to transactions through funded or unfunded participations, often at mezzanine level.
Structured Debt Funds
Structured Debt Funds are managed investment vehicles that primarily invest in debt investments. These funds have the flexibility of traditional funds but also incorporate a tranched capital structure to attract investors with different risk appetites. They can invest in a portfolio of eligible assets and are typically funded through the issuance of debt with varying levels of seniority, and sometimes debt securities.
Risk Management Products
IFC offers Client Risk Management solutions to clients and projects, allowing them to mitigate interest rate, currency, or commodity risk through hedging products they could not easily access from international markets at competitive levels. By absorbing the credit risk of its clients, IFC can leverage its triple-A (AAA/Aaa) rating to facilitate access to relevant risk management solutions.
Debt Capital Market Products
IFC helps corporates access domestic and international capital markets by providing credit enhancement, or anchor investments, for bonds issued by its clients, facilitating successful issuances.