IDB Invest issues more bonds for coronavirus response

IDB Invest issues more bonds for coronavirus response

Funds Debt Loans Structured Finance Latin America Caribbean US Bonds Coronavirus

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IBD Invest said Tuesday that it sold $1 billion worth of three-year bonds bonds to fund a lending program for companies affected by the COVID-19 pandemic, building on a $1 billion issue in April.

The Washington DC-based multilateral lender, part of the Inter-American Development Bank (IDB), priced the new 0.5% notes at 99.959 to yield 0.513%, equal to 29 basis points over mid-swaps or 33.75 basis over US Treasury bonds, it said in a press release.

The bookrunners BMO, Citi, Goldman Sachs and TD Securities took more than $1.55 billion in orders from 51 investors with 38% of buyers from the Americas, 37% from Europe, the Middle East and Africa (EMEA) and 25% from Asia, it added.

Central banks and official institutions bought 75% of the notes on offer, followed by fund managers with 14%, commercial banks with 7% and insurers and pension plans with 4%, according to IBD Invest.

In April, when IDB Invest issued $1 billion in two-year bonds, it printed the notes with a coupon of 0.75%, equal to 38 basis points over mid-swaps. The multilateral lender said at the time that it could direct up to $7 billion for companies in Latin America and the Caribbean impacted by the pandemic. 

IDB Invest also said on Tuesday that it has formed a $30 million fund with SVB Financial Group (SVB) and Partners for Growth (PFG) to provide loans to startup companies in Latin America and the Caribbean.

The Latam Growth Lending Fund will be the first venture debt fund in the region and have an investment period of four years and eight months, IDB Invest said in a press release on Tuesday. The fund will offer loans to "young and high-growth companies" in sectors like computer software, healthcare, agricultural technology (agritech), educational technology (edtech) and financial technology (fintech), among others, it added.

"In the current context of the COVID-19 crisis, and given the fund's focus on the innovation and technology economies, the project has great potential to help offset its effects by supporting high-productivity investment, which would have been relegated by the current effect of the crisis," IDB Invest said.

The multilateral lender said in January that it could invest $15 million to cover 49% of the fund. It also said the fund will make investments from $1 million to $5 million each.