February 8, 2023

The OPEC Fund for International Development, a development institution created by the governments of the member states of the Organization of the Petroleum Exporting Countries almost 50 years ago, has raised $1 billion from its first-ever bond sale.

The bonds have a three-year term at 4.5% per annum and must also be classified as “sustainable development” bonds, and their funds go to projects in the areas of food security, health care, infrastructure, education, employment and renewable energy.

This class of bonds is increasingly sought after by investors who want to invest in instruments with greater environmental and social benefits.

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Martin Mills-Jansen, chief financial officer of the OPEC Fund, said that central banks in the Middle East, Europe and Asia and other “official” institutions, including US ones, account for 62 percent of bond buyers.

Banks made up 19 percent, with asset managers, insurance and pension funds nearly the rest. Geographically, 52 percent of buyers were from the EMEA region, 27 percent from Asia Pacific and 21 percent from North America.

She added that the OPEC Fund now plans to issue dollar bonds annually to build what bankers call a “curve,” a tool that helps measure the cost of borrowing.

And it indicated that the fund could be doing well-opportunity trades, as well as trades in smaller markets and possibly other currencies. “The beauty of making transactions is that you have something to rely on,” she said.

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