NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Impact Investment Exchange (IIX) has successfully priced the US$27.7 million Women’s Livelihood BondTM 3 (WLB3), the third bond in the award-winning Women’s Livelihood BondTM Series (WLB Series). Advancing a total of 13 United Nations Sustainable Development Goals (SDGs), the WLB3 complies with the International Capital Markets Association (ICMA) Social Bond Principles and will support 180,000 underserved women and women entrepreneurs in the Asia Pacific region to respond, to recover from, and to build resilience in the aftermath of the COVID-19 pandemic. The WLB3 is also the maiden investment of IIX’s Women’s Catalyst Fund, a next generation gender lens vehicle designed to accelerate innovative financial instruments for women.

The WLB3 continues to gather global momentum by bringing together a diverse range of public and private sector partners, including the United States Agency for International Development (USAID) and the United States International Development Finance Corporation (DFC), Shearman & Sterling, Latham & Watkins, Cyril Amarchand Mangaldas, Clifford Chance, ANZ as the lead placement agent, Standard Chartered Bank, DBS Bank, Partnering for Green Growth and the Global Goals 2030 (P4G), Global Affairs Canada (GAC), the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the  United Nations Capital Development Fund (UNCDF). Nuveen has returned as an investor for the third issuance, along with several new institutional investors from New Zealand such as Pathfinder NZ.

IIX’s CEO and Founder, Professor Durreen Shahnaz, said, “At a time when COVID-19 caused governments, investors, and businesses to turn inward and leave behind millions of underserved women, we took a stand to do what is right. We closed a deal of immense proportions during a pandemic, and taught the world’s leading institutions how to create a new financial product that works for the 99%. Our astounding success is due to the fact that we dare to do what no one else is doing by valuing women and making them a part of the global financial system. But we’re not stopping there. With each innovative financial instrument, we’re going to keep pushing the boundaries of financial markets so that we create truly systemic change that will outlast any pandemic.”

The WLB3 is part of the US$150 million WLB Series, a series of innovative debt securities that create sustainable livelihoods for over 3 million women across developing countries. The WLB3 is supporting women-focused enterprises in India, Indonesia, Cambodia, and the Philippines that are directly supporting women to respond to, recover from, or rebuild their livelihoods in the COVID-19 pandemic. The WLB3 follows on the heels of the successful close of the US$12 million WLB2 in January 2020, demonstrating how innovative gender lens products can be accelerated even during a global downturn by addressing key elements of risk, return, and impact for investors.

Gloria Steele, Deputy Assistant Administrator of USAID’s Bureau for Asia, said, “The Women’s Livelihood Bond Series continues to prove how public and private sector collaboration can drive inclusive growth and women’s empowerment during one of the toughest historical moments the world has seen. We welcome new partners who are joining the tide to increase economic opportunities for women across the region, helping countries in their journey to self-reliance and to achieving the prosperity that all nations seek.”

Paul White, Head of Capital Markets at ANZ, said, “We are proud to partner with IIX for their third and largest Women’s Livelihood Bond. The transaction was well received from a broad spectrum of investors who are searching for a social impact investment and we were especially pleased with the depth of demand from our Australia and New Zealand investor base. IIX and the Women’s Livelihood Bond 3 are aligned with our purpose to shape a world where people and communities thrive.”

“ESCAP is supporting women entrepreneurs to access affordable and well-regulated financial services at this critical time. Investing in businesses run by women not only helps with the recovery of the business sector, but also the recovery of families on which women’s income is predominantly spent.  Building partnerships and coalitions between the public and private sector is a central part of our support and we are proud to partner with IIX, UNCDF and the many supporters of this initiative to accelerate access to financing for women entrepreneurs,” said ESCAP Deputy Executive Secretary Kaveh Zahedi.

IIX’s newly-launched Women’s Catalyst Fund (WCF), an innovative gender lens investment vehicle designed to accelerate funding for underserved women in developing countries to build COVID-19 resilience, made its maiden investment in support of the WLB3. The WCF provided first-loss capital which encouraged participation by private sector investors. Backed by the Taiwan International Cooperation and Development Fund (TaiwanICDF), the WCF addresses persistent hurdles of the lack of catalytic capital for scaling gender-lens investing by encouraging investment from new private sector investors. Specifically, the WCF provides first-loss capital in the form of subordinated notes to gender-lens innovative financial instruments such as IIX’s WLB Series. This first-loss capital mobilizes private sector investors by reducing the risk to such investors, thereby catalyzing private sector participation into gender-lens investments that empower underserved women and women entrepreneurs in developing countries.

In 2017, IIX launched the first of the WLB Series, the Women’s Livelihood Bond^TM 1 (WLB1)—which is the world’s first impact investing instrument to be listed on a stock exchange. Listed on the Singapore Exchange (SGX) and quoted on Bloomberg, the WLB1 is also Asia’s first multi-country listed gender bond, reporting both social and financial returns. With the success of the WLB1, IIX issued the US$12 million WLB2 in January 2020. Each issuance continues to grow in size and expand to include more countries and new sectors. IIX plans to issue the next bond in the WLB Series in Q4 2021.

Photo courtesy of Christina @ wocintechchat.com.