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On July 12th 2017, FMO, the Dutch Development Bank, issues the first-ever floating rate Costa Rican Colon (CRC) linked note.
This transaction follows six local currency transactions in Dominican Peso, Tajik Somoni, Georgian Lari and Brazilian Real earlier in the year. The repeat issuance of local currency linked bonds reflects FMO’s strategy to promote financing in frontier currencies. With this bond issuance FMO acts as a catalyzer for increased lending in CRC. The Currency Exchange Fund (TCX) provided a hedge to FMO. By issuing this CRC linked bond and hedging the cash flows with TCX, FMO facilitates the creation of additional capacity for CRC linked lending and hedging. FMO is pursuing opportunities, including potential transactions in CRC, to increase its financing in Central America where it has a healthy portfolio of investments across all its focus sectors: financial institutions, (renewable) energy, and agribusiness.
FMO invests in sectors where it believes its contributions have the highest long-term impact. The cash flows of this CRC linked bond are calculated in CRC and settled in USD. The bond has a maturity of 3 years, a floating rate linked to 6 months Tasa Basica and a notional of USD 7 million, which is equivalent to CRC 4.1 billion. The current deal was structured, arranged and distributed by ING and issued under FMO’s Debt Issuance Program. The bond will be listed in Luxembourg.
FMO is the Dutch development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development, and has a 45-year proven track record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.8 billion spanning over 85 countries, FMO is one of the larger bilateral private sector developments banks globally. For more information please, visit www.fmo.nl.