Washington, D.C., September 10, 2018 – The World Bank (International Bank for Reconstruction and Development or IBRD), rated Aaa/AAA, will for the first time, issue US dollar-denominated sustainable development notes that provide investors return exposure to the environmental, social and governance (“ESG”) performance of UN Global Compact signatories through the Global Sustainability Signatories Index 7.5% VC ER.
UBS is the exclusive underwriter of this equity index-linked 7-year note and will distribute it to its investment banking and wealth management clients. The index was created by Sustainalytics and is composed of up to 100 companies who demonstrate strong ESG performance, according to Sustainalytics ratings. The index is administered by Solactive.
UBS partnered with the World Bank in the development of this transaction. It is part of UBS's ESG investment strategy aligned with the Sustainable Development Goals (“SDGs”), which includes initiatives to help UBS clients and other stakeholders support the World Bank's development mandate. The World Bank uses proceeds raised through Sustainable Development Bonds to support the financing of projects that advance its goals of eliminating extreme poverty and boosting shared prosperity in alignment with the SDGs.
Arunma Oteh, World Bank Vice President and Treasurer, said: "We are delighted to broaden our partnership with UBS and bring to market another innovation that offers investors sustainable investment opportunities. Together, we will continue to focus on new ways to put capital to work to address the immense development challenges we must tackle to achieve the Sustainable Development Goals.”
Michael Nelskyla, Head of Investor Solutions at UBS Investment Bank, said: "We are privileged to work with the World Bank and the UN systems to offer new innovations to support the Sustainable Development Goals. This effort reflects our commitment to be the leading provider of products that help align our client's financial objectives with their priorities to support sustainability. We thank the clients committing capital to this initiative and hope it will encourage others to embrace innovative sustainable instruments in the future."
Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, said: "We are delighted to expand our investing partnership with the World Bank. Our private clients already enjoy unique exposure to the World Bank and to leading sustainable companies through our new 100% sustainable cross-asset portfolio, and we look forward to developing their engagement with IBRD as one of the few fully sustainable triple-A-rated issuers."
UBS will donate a percentage of its revenues from the notes to the UBS Optimus Foundation, to finance projects linked to the SDGs. UBS Optimus Foundation will select investments that are aligned with the focus of the Global Financing Facility (“GFF”) on women, children and adolescents. GFF is a multi-sectoral innovative financing platform for human capital development.
Issuer | International Bank for Reconstruction and Development, IBRD |
Issuer rating | Aaa/AAA |
Maturity | 7 years |
Index | The return on the Bonds is linked to the performance of the Global Sustainability Signatories Index 7.5% VC ER (Bloomberg: GSSI Index) |
Initial observation date** | October 22, 2018 |
Final observation date** | October 22, 2025 |
Settlement date** | October 29, 2018 |
Maturity date** | October 29, 2025 |
Specified denomination | USD 1,000 |
Offer price | 100% of the specified denomination, i.e. USD 1,000 |
Final Redemption Amount | Specified denomination plus Premium Paid at Maturity |
Premium Paid at Maturity | The product of US$1,000 multiplied by the Participation Rate multiplied by the greater of (i) the Index Return and (ii) zero (0) |
Participation Rate | To be determined on the trade date |
Index Return | The quotient equal to (i) the index closing level on the final observation date minus the index closing level on the initial observation date divided by (ii) the index closing level on the initial observation date |
Clearing systems | DTC, Euroclear and Clearstream, Luxembourg |
ISIN | US45905UW348 |
Lead Manager | UBS Securities LLC |
*This press release does not constitute an offer for sale of the securities described. The offering and sale of the securities described in this document are subject to restrictions under the laws of several jurisdictions. Securities may not be offered or sold except in compliance with all such laws.
** Expected date.
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, it is the original member of the World Bank Group and operates as a global development cooperative owned by 189 nations. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to support the Sustainable Development Goals and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing sustainable development bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. More information on World Bank bonds is available at www.worldbank.org/debtsecurities.
About UBS
UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. UBS's strategy is centered on our leading global wealth management business and our premier universal bank in Switzerland, enhanced by Asset Management and the Investment Bank. The bank focuses on businesses that have a strong competitive position in their targeted markets, are capital efficient, and have an attractive long-term structural growth or profitability outlook.
About the Global Financing Facility
The Global Financing Facility (GFF) is a multi-stakeholder partnership that is helping countries tackle the greatest health and nutrition issues affecting women, children and adolescents. The GFF supports governments to bring together partners around a country-led plan, prioritizing high-impact but underinvested areas of health. The GFF Trust Fund acts as a catalyst for financing, with countries using modest GFF Trust Fund grants to significantly increase their domestic resources alongside the World Bank’s IDA and IBRD financing, aligned external financing, and private sector resources. Each relatively small external investment is multiplied by countries’ own commitments—generating a large return on investment, ultimately saving and improving lives. Learn more: www.globalfinancingfacility.org and @theGFF
