IFC has developed products that provide clients with forms of cost-effective financing not otherwise available to them. Products include credit enhancement structures for bonds and loans through partial credit guarantees, risk-sharing facilities, and participations in securitizations. Learn more...
Partial credit guarantees allow IFC to use its international triple-A credit rating to help clients diversify their funding sources, extend maturities, and obtain financing in their currency of choice, including local currency. In securitization transactions, IFC participates as a structuring investor or guarantor. Partial loan and bond guarantees also help broaden clients' access to international and local capital markets. Credit enhancement structures help clients attract new sources of financing in their currency of choice, reduce borrowing costs, and extend maturities beyond what private investors would otherwise provide.
Risk-sharing facilities allow clients to transfer credit risk to IFC from their own portfolio or from a new portfolio they originate. The assets typically remain on the clients' balance sheet, and the risk transfer comes from a partial guarantee provided by IFC. In general, clients will enter into such a facility with IFC because it helps them increase their capacity to originate new assets within an asset class in which IFC seeks to increase its own exposure.
Securitizations help IFC's clients obtain financing that would otherwise be unavailable or unsuitable to them because of perceived credit risk. Thisform of financing involves the pooling and actual sale of financial assetsand issuance of securities that are repaid from the cash flows generated bysuch assets. The risk associated with this form of financing comes from the asset pool rather than from the institution that originated those assets. Securitizations are commonly done for mortgages, credit cards, auto and consumer loans, corporate debt, and other assets with relatively predictable cash flows.
