MOBILIST invests in breakthrough IFC securitisation programme
A vital equity investment from MOBILIST represents a breakthrough in mobilising private capital for development by using publicly listed securities to enable private sector investors to invest in multilateral development bank (MDB) assets.
The Foreign, Commonwealth & Development Office, through its flagship public markets investment programme, MOBILIST, partnered with the World Bank’s private sector arm – the International Finance Corporation (IFC) – and invested $25 million in the first issuances of its Emerging Markets Securitisation Program (EMSP).
Working in partnership with the UK government over a 12-month period, the IFC has issued its first Collateralised Loan Obligation (CLO) structure, which includes senior notes that have been listed on the London Stock Exchange. The underlying loans were made by the IFC to companies in low- and middle-income countries to tackle global issues like economic growth and poverty reduction. The inaugural transaction has attracted $450 million in private capital.
As an investor, MOBILIST is demonstrating its vital role in advancing the ambitions of MDBs to share and distribute risk and to free up billions of pounds in capital for new investments, responding to calls from MDB shareholders and the G20. The programme worked with the IFC to help shape the transaction and ensure its investment, on commercial terms, providing a standard template for other equity investors in future iterations of the transaction and beyond.
The IFC plans to carry out similar transactions on a regular cadence in the future, which are expected to attract billions more dollars in capital. The deal is the first of its kind in the development finance industry and effectively creates a new investible asset class, paving the way for pension funds and other sources of private finance to invest in emerging markets, including through the London Stock Exchange.
This is key to mobilising the scale of finance needed to tackle global issues like job creation and the climate and nature crisis, not least because the majority of global investment flows through public markets, such as stock exchanges. The EMSP is part of a broader move by the UK and the World Bank to encourage more private investment in low and middle-income countries and to create large and diverse enough opportunities to appeal to institutional investors.
The Rt Hon Baroness Chapman of Darlington, Minister of State – International Development and Africa, gave details of the UK’s support and work to maximise private investment in the Global South when she attended the World Bank Annual Meetings in Washington D.C. this week. Baroness Chapman said:
“This partnership with the World Bank shows how we are modernising our approach to international development. This is exactly the kind of innovative approach we need – using British expertise through our MOBILIST programme and the UK’s world-leading position in global finance to help countries develop and grow, ultimately reducing their need for aid.”
This latest transaction confirms MOBILIST’s role in supporting highly innovative securitisation transactions, putting risk transfer approaches into practice, and highlighting the potential of EMDEs as investment destinations for private capital at scale. MOBILIST previously invested in Bayfront Infrastructure Capital IV Pte. Ltd. (BIC IV), which saw the listing of infrastructure asset-backed securities on the Singapore Exchange.
It also builds on the UK’s work with the Governments of Norway and the Philippines, the African Development Bank and others on the EMDE Public Markets Coalition, which was launched at the Fourth International Conference on Financing for Development in Seville. The Coalition will work with development finance providers to unlock more private capital in developing countries through public markets, such as stock exchanges.
The Rt Hon Baroness Chapman of Darlington and Makhtar Diop, Managing Director of the International Finance Corporation (IFC), in conversation about the transaction during the World Bank Annual Meetings.