Article/Intelligence
World Bank’s IFC Closes Its Debut Emerging Markets CLO via Goldman Sachs
The World Bank’s International Finance Corp. has closed its innovative debut CLO backed by emerging markets loans, the firm announced. The deal, named IFC Emerging Markets Securitization 2025-1, was arranged by Goldman Sachs.
According to Moody’s Ratings and IFC, the $320 million senior triple-A tranche priced at SOFR+130 bps. Meanwhile, the $130 million unrated junior tranche priced at SOFR+220 bps and carries 10% par subordination.
The deal, which Octus initially reported on in May, consists of 57 obligors from across Asia, the Middle East, North Africa, South America, Sub-Saharan Africa and Europe. Additionally, 18.8% of these obligors are in the beverage, food and tobacco sectors, with 13% in telecommunications and another 13% in construction and building.
IFC will remain the lender of record for these loans, and retain its own account risk of at least 25% per loan prior to the special purpose vehicle.
IFC says that the $510 million CLO comes after two years of work and represents a new asset class for emerging markets that meets institutional investment standards, opening the door to the world’s largest pools of capital including pension funds, insurance companies and asset managers to invest in emerging markets.
“Mobilizing private investment at scale is essential for creating the jobs that give people a ladder out of poverty and begin the journey of changing a family’s trajectory for generations,” said Ajay Banga, World Bank Group president. “This is step one in an originate-to-distribute strategy that holds significant potential to attract private capital at scale. It also frees up our balance sheet so we can support more countries and private sector players. The opportunity and need are much larger – and so is our ambition.”
The World Bank Group said it will launch regular CLO issuances and establish a scalable and replicable model for future growth.
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