IFC launches 2nd Taino Bond, raising US$4M for microfinance in the Dominican Republic
Washington, D.C.—IFC, a member of the World Bank Group,issued a six-and-a-half-year 180 million Dominican peso-denominated bond(approximately US$4 million) to support domestic capital markets and boostfinancing for micro-entrepreneurs in the Dominican Republic. This marks thesecond IFC bond issuance in the country’s domestic capital markets.
IFC will invest the bond proceeds in Banco de Ahorro yCrédito ADOPEM S.A., a leading microfinance institution in the DominicanRepublic, to expand long-term, local currency lending to micro-entrepreneurs.Since it was founded Banco ADOPEM has focused on supporting the most vulnerablesectors of society. Approximately 60% of its customers have access to financingexclusively through Banco ADOPEM. 92% of its customers are considered to beunder the poverty line. After two years in the organization, 35% of thesecustomers rise out of poverty.
"With this financing from IFC we continue to promotefinancial and economic inclusion, offering services that are tailored to theneeds of our customers," said Sonia Reyes, Vice President of Finance andAccounting at Banco ADOPEM.
IFC issued its first bond in the Dominican Republic in 2012and established a US$100 million-equivalent bond program which allows IFC toregularly issue bonds in the country’s capital markets. The program was put inplace with the strong support of the country’s government, regulatory authorities,and market participants.
"One of IFC’s priorities in the Dominican Republic isto support financial inclusion and promote the development of the capitalmarket. Through the Taino bond program, IFC is providing Dominican companieswith long-term financing in local currency, and mobilizing funds to create jobsand help micro-entrepreneurs," said Guillermo Villanueva, IFC’s ResidentRepresentative in the Dominican Republic. “Efficient domestic capital marketscreate alternative channels of funding for the private sector and reduceeconomies’ dependence on foreign debt."
IFC’s objectives in the Dominican Republic are to fosterfinancial and economic inclusion, improve the country’s competitiveness, andpromote investments in cleaner and affordable energy generation. As of July2016, IFC had a $298 million active investment portfolio in the DominicanRepublic, including $96 million mobilized from partnering financialinstitutions. Through its advisory programs with the private sector andgovernment, IFC also supports access to finance, public- private partnerships,and improves the investment climate for the country.
The yield on IFC’s bond was 8.75%. Citinversiones deTítulos y Valores, S.A. (Puesto de Bolsa) acted as lead structurer on thetransaction, and together with BHD León Puesto de Bolsa, S. A., acted as co-placementagents for the bond.
"Issuances like the Taino Bono II favor thediversification of the Dominican Republic’s capital markets, providing investmentalternatives for domestic savings with the support of an issuer with the strongreputation of the International Finance Corporation," said Hamlet HermannMorera, General Manager and Executive Vice President of the Stock Exchange ofthe Dominican Republic.
IFC, a member of the World Bank Group, is the largestglobal development institution focused on the private sector in emergingmarkets. Working with more than 2,000 businesses worldwide, we use our capital,expertise, and influence, to create opportunity where it’s needed most. InFY15, our long-term investments in developing countries rose to nearly $18billion, helping the private sector play an essential role in the global effortto end extreme poverty and boost shared prosperity. For more information, visitwww.ifc.org