Washington, DC, 12 September 2016 – The World Bank (International Bank for Reconstruction and Development or “IBRD”, rating Aaa/AAA1) is pleased to announce the issuance of two new three-year Sustainable Development Bonds denominated in Brazilian Real (BRL) and South African Rand (ZAR). These bonds are an opportunity for retail investors to combine their financial objectives with social and environmental sustainability goals.
The World Bank raises funds in the international capital markets to support sustainable development projects in borrowing member countries. These projects focus on poverty reduction and inclusive growth across a range of sectors including education, health care, agriculture and food security, and essential infrastructure. World Bank Sustainable Development Bonds provide investors with an opportunity to support member countries achieve their development goals.
This is the first time World Bank has offered BRL- and ZAR-denominated bonds for Italian retail investors. The bonds will be offered from September 12th to September 16th via the Italian Stock Exchange to any other bank or financial intermediary at a fixed price (“Offer Price”) equal to BRL 10,000 (about EUR 2,7002) and ZAR 40,000 (about EUR 2,5002). These bonds will be listed on Borsa Italiana (MOT), where BNP Paribas will act as Liquidity Provider.
The BRL-denominated Sustainable Development Bond pays a coupon every quarter at an annual rate of 7.60%. At maturity in September 2019, investors are entitled to the repayment of 100% of their original capital investment4 in BRL by the World Bank. All payments (coupons and redemption at maturity) will be made in EUR.
The ZAR-denominated Sustainable Development Bond pays a coupon every quarter at an annual rate of 6.60%. At maturity in September 2019, investors are entitled to the repayment of 100% of their original capital investment4 in ZAR by the World Bank. All payments (coupons and redemption at maturity) will be made in EUR.
For these bonds, the World Bank partnered with BNP Paribas, acting as Dealer and Liquidity Provider.
“We are pleased to offer Italian investors two new Sustainable Development Bonds that not only meet investor demand for diversification and yield, but also empower investors to make a positive impact in communities around the world. As the Sustainable Development Goals have become a vital part of the global discussions around poverty reduction and economic sustainability, I am especially heartened to see individual investors doing their part to see the SDGs become a reality. Investor that prioritise this kind of social responsibility alongside their financial needs should not just be encouraged but also celebrated,” said Arunma Oteh, Vice President and Treasurer of the World Bank.
Summary of terms (*) | ||||
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) | |||
Issuer rating: | Aaa /AAA1 | |||
Maturity: | 3 years | |||
Subscription period: | Sep 12th to Sep 16th subject to early closing under the conditions reported in the final terms | |||
Issuance date: | Sep 26th, 2016 | |||
Coupon: | 7.60% p.a. (BRL) | 6.60% p.a. (ZAR) | ||
Quarterly coupon payment dates: | March 26, June 26, September 26 and December 26 in each year from and including December 26, 2016 to and including the Maturity Date | |||
Offer price (minimum purchase amount): | BRL 10,000 (about EUR 2,700) | ZAR 40,000 (about EUR 2,500) | ||
Listing: | EuroMOT of Borsa Italiana | |||
Clearing systems: | Euroclear, Clearstream | |||
ISIN: | XS1488416329 (BRL) | XS1488416592 (ZAR) | ||
Dealer: | BNP Paribas | |||
All payments for the purchase, coupon payments, and principal repayment at maturity are settled in EUR.
(*) Nothing in this document should be construed as a solicitation or offer, legal, tax or other advice, or recommendation to engage in any transaction. The information in this document does not constitute a recommendation of the instruments referred to. It merely provides information and is not intended to be either a recommendation to acquire financial products or an offer or invitation to tender. Any offer of any of the two Sustainable Development Bonds 09/2019 will solely take place on the basis of the Prospectus, the relevant Final Terms and related legal documentations. For a detailed description of the Terms and Conditions of the Sustainable Development Bonds 09/2019 and the related risks with regard to an investment in either Bonds, please see the relevant legal documentation available at www.obbligazionisostenibili.org.
“We are extremely proud of this collaboration with the World Bank: these supranational bonds are particularly interesting, as interest rates in EUR reached their historical lows. These issuances are not subject to bail-in and provide investors with benefits in terms of both currency diversification and reduced tax rate equal to 12.50%,” said Nevia Gregorini, Head of Public Distribution, BNP Paribas Corporate & Institutional Banking.
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA1 (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 60 years to fund its activities that achieve a positive impact. Information on World Bank bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities
For more information about World Bank Sustainable Development Bonds, see:https://treasury.worldbank.org/sustainableinvesting.
About BNP Paribas
BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 75 countries, with more than 189,000 employees, including more than 146,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporate and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail-banking model in Mediterranean countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.
1) Moody’s rating as of 2/19/2016; Standard & Poor’s rating as of 5/23/2016.
2) As of September 6th 2016.
3) Amount subject to the World Bank’s credit risk and foreign exchange risk where the investor changes the capital and coupons into EUR.
