Vision to Program to Projects (V2P2P)

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IFC Partial Credit Guarantees

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The IFC partial credit guarantee (PCG) is a credit enhancement mechanism for debt instruments (bonds and loans). It is an irrevocable promise by IFC to pay principal and/or interest up to a pre-determined amount. Typically, the guarantee is structured to cover 100% of each debt service payment, subject to a maximum cumulative payout equal to the guarantee amount. The guarantee amount is usually expressed as a percentage of principal and amortizes in proportion to the bond or loan. In certain circumstances, this percentage can increase or decrease in the later years of the debt obligation, depending upon the needs of the borrower or creditors.

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