IFC expands emerging markets investment platform with $509 million deal

The organisation believes that expanding access to institutional capital through market-based instruments can help direct funding toward businesses with the greatest potential to generate economic growth and create jobs.

The International Finance Corporation (IFC), part of the World Bank Group, has completed a second major securitization transaction under its Emerging Markets Securitization Program (EMSP), a move designed to channel more private investment into developing economies and support business growth, job creation, and economic development.

The $509 million transaction follows the program's inaugural deal completed in September 2025 and forms part of the World Bank Group's broader strategy to attract institutional investors into emerging markets through scalable and market-based financing solutions. By packaging loans into tradeable securities, the initiative allows IFC to recycle capital and expand its lending capacity, creating additional funding opportunities for businesses across developing countries.

Transaction draws strong demand from global investors

The latest deal bundles 62 IFC-originated loans from a range of sectors and countries into a collateralized loan obligation (CLO), providing investors with access to a diversified portfolio of emerging market assets through a familiar investment structure. Investor interest exceeded available supply, making the transaction oversubscribed. The structure includes multiple investment tranches tailored to different risk appetites. Senior notes worth $320 million and $50 million received top-tier ratings of Aaa and Aa1 from Moody's and were sold to private investors.

An $80 million mezzanine tranche received backing from a consortium of international credit insurers, while a $59 million equity tranche is jointly held by IFC and the United Kingdom's Foreign, Commonwealth & Development Office (FCDO). The senior notes are listed on the London Stock Exchange, supported by the UK government's MOBILIST initiative, which aims to encourage private investment into developing markets.

Innovative model seeks to close development financing gap

The transaction forms part of the World Bank Group's originate-to-distribute strategy, which focuses on creating investment products that connect institutional capital with businesses operating in emerging economies. Rather than holding loans on its balance sheet for their full duration, IFC packages portions of its loan portfolio into securities that can be purchased by pension funds, insurers, asset managers, and other large investors. This process frees up capital that can be redeployed into new development projects. Officials say the approach helps address the significant financing gap facing developing economies by creating a repeatable pathway for private capital to participate in markets that are often perceived as difficult to access.

Growing market for emerging economy investments

The second transaction builds on momentum from the first issuance and introduces an additional Aa1-rated tranche, broadening the range of investment options available to institutional buyers. Together, the two transactions have generated more than $1 billion in issued securities.

Participants in the latest deal include major investors such as PIMCO, Legal & General, Shizuoka Bank, Sona Asset Management, and several other institutional investors. The insurance consortium backing part of the structure includes AXA XL, AXIS Capital, Everest, HDI Global, Liberty Specialty Markets, and MSIG USA.

World Bank Group officials say developing deeper and more liquid markets for emerging market credit remains essential to meeting the scale of investment needed to support employment, infrastructure, and private sector expansion across developing economies. The organisation believes that expanding access to institutional capital through market-based instruments can help direct funding toward businesses with the greatest potential to generate economic growth and create jobs.