International Finance Corporation, the private sector arm of the World Bank Group, has entered into a floating-rate U.S. dollar swap off the back of a USD1 billion, five-year bond issue with a 4% coupon.
Nina Shapiro, IFC treasurer in Washington, D.C., explained the corporation entered the swap because its balance sheet is in floating rate U.S. dollars. She said the IFC always enters into swaps after issuing bonds to avoid carrying currency and maturity risk, adding if the client wants local currency, the IFC swaps again.
Shapiro would not name the counterparties, whose credit rating must be at least single A, and declined to specify the floating rate received. BNP Paribas, Citigroup and UBS led the deal. IFC is rated AAA by Standard & Poor's and Moody's Investors Service.