Washington, D.C., December 17, 2018—The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) has priced new bonds that offer retail investors in Hong Kong and Singapore the opportunity to promote the Sustainable Development Goals (SDGs). Returns on the bond are linked to an equity index that tracks the performance of companies advancing global development priorities set out in the SDGs, including climate, gender, and health. This marks the first time that the World Bank has offered SDG index-linked bonds to retail investors in Asia.
The return on investment in the bonds is directly linked to the stock performance of companies included in the Solactive Sustainable Development Goals World MV Index. The index tracks 30 companies that, based on the methodology developed by Vigeo Eiris’ Equities, dedicate at least one fifth of their activities to sustainable products, or are recognized leaders in their industries on socially and environmentally sustainable issues. Solactive applies volatility and diversification filters to reach the final index composition. Vigeo Eiris is a global provider of environmental, social and governance research to investors and public and private corporates.
Previously, the World Bank has issued SDG index-linked bonds in Belgium and Switzerland, with another offering currently underway in Australia.
The World Bank will use the proceeds to support the financing of projects that advance its goals of eliminating extreme poverty and boosting shared prosperity, and that are aligned with the SDGs.
The issuance builds on growing demand from institutional and retail investors for high quality, liquid assets that promote social impact. The five-year bonds raised US$3.52 million.
Earlier this year, the World Bank issued its first Hong Kong dollar-denominated green bond. The World Bank is also a frequent issuer in Singapore, with more than SGD2.7 billion in bonds issued for local investors since 2009.
George Richardson, World Bank Head of Capital Markets, said: “We are delighted to introduce World Bank SDG index-linked bonds to retail investors in Hong Kong and Singapore. The bonds respond to the strong and growing interest in socially responsible investments and for the World Bank’s development mandate from retail investors in Asia.”
The bonds are arranged by BNP Paribas as part of the “SDGs Everyone” initiative. Under the initiative, the World Bank issues bonds to support the financing of projects that support the SDGs, and investors benefit from the performance of companies included in the equity index.
Pascal Fischer, Head of Global Markets for APAC, BNP Paribas said: “BNP Paribas is committed to aligning its business to the UN Sustainable Development Goals. This transaction is a new frontier in how we can support investors in accessing innovative products that contribute towards a positive societal outcome and support the achievement of the SDGs.”
Standard Chartered is the sole distributor of the bonds.
Learn more about World Bank Sustainable Development Bonds here: https://youtu.be/IS7l7KSZJK0
Summary of terms (*) | |
Issuer: | International Bank for Reconstruction and Development, IBRD |
Issuer rating: | Aaa /AAA (Moody's / S&P) |
Issuance amount: | USD 3,520,000 |
Settlement date: | December 14, 2018 |
Maturity: | 5-year |
Index: | Solactive Sustainable Development Goals World MV Index (SOLWGOAL) |
Coupon: | None |
Maturity date: | December 14, 2023 |
Issue price: | 100% |
Specified Denomination: | USD 10,000 |
Final redemption at maturity (per Specified Denomination): | Specified Denomination plus any Index Linked Interest Amount |
Index Linked Interest Amount:
| The product of USD 10,000 multiplied by the Participation Rate multiplied by the greater of (i) the Final Index Return and (ii) zero (0) Final Index Return = the quotient, expressed as a percentage, as calculated by the Calculation Agent, equal to (i) the Final Index Level (closing level of the Index on November 30, 2023) minus the Initial Index Level (closing level of the Index on December 3, 2018) divided by (ii) the Initial Index Level |
| Participation Rate = 165% |
Listing: | None |
ISIN: | XS1896850929 |
Clearing system: | Euroclear, Clearstream |
Sole lead manager: | BNP Paribas |
* This press release is not an offer for sale of bonds of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank". Any offering of the bonds will be made only by means of a prospectus containing detailed information that will made available through BNP Paribas, and is subject to restrictions under the laws of several countries. Securities may not be offered or sold except in compliance with all such laws.
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944 and the original member of the World Bank Group. It operates as a global development cooperative owned by 189 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank has two main goals: to end extreme poverty and promote shared prosperity. It seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. It has been issuing sustainable development bonds in the international capital markets for over 70 years to fund its activities that achieve a positive impact. Information on World Bank bonds for investors is available here www.worldbank.org/debtsecurities.
Bond Proceeds
The World Bank (IBRD) issues USD 50 to 55 billion in bonds for sustainable development projects and programs every year. Bond proceeds are used to support the financing of sustainable development projects and programs in countries that are middle-income or creditworthy lower-income IBRD members and working in partnership with IBRD to eliminate extreme poverty and boost shared prosperity. Projects supported by IBRD are designed to achieve a positive social impact and undergo a rigorous review and internal approval process aimed at safeguarding equitable and sustainable economic growth.
