Washington, D.C., November 26, 2020 - The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) has priced a New Zealand dollar-denominated dual tranche of NZD 1 billion and NZD 300 million fixed-rate global Sustainable Development Bond transactions.
The 5.5-year NZD 1 billion bond offers a coupon of 0.75% p.a. payable semi-annually with a June 10, 2026 maturity and has an issue price of 99.967736% to yield 0.756% (semi-annual). This equates to a spread of 43.1 basis points over the 2.75% New Zealand Government Bond due April 15, 2025.
The 10-year NZD 300 million bond offers a coupon of 1.25% p.a. payable semi-annually with a December 10, 2030 maturity and has an issue price of 99.448671% to yield 1.309% (semi-annual). This equates to a spread of 41.4 basis points over the 1.50% New Zealand Government Bond due May 15, 2031.
The benchmark lines were launched with an initial minimum target size of NZD 200 million and NZD 100 million respectively and increased due to very high investor demand. The new 5.5-year is the World Bank’s largest-ever NZD benchmark bond and the largest of any Sovereign, Supranational, and Agency (SSA) issuer of any maturity in a single offering in the Kauri market.
Collectively over 2020, the World Bank has issued NZD 2.9 billion in the Kauri market in maturities ranging from 2024 to 2030.
The bonds were distributed to a broad range of institutional investors both domestically and internationally; 89% with New Zealand and 11% with international investors for the 5.5-year maturity, and 92% with New Zealand and 8% with international investors for the 10-year maturity. Both tranches were distributed among asset managers, bank treasuries and official institutions.
The joint-lead managers for the transaction are ANZ Bank New Zealand Limited (ANZ), Bank of New Zealand (BNZ), and Commonwealth Bank of Australia (CBA).
“This is a fantastic trade. It’s our first dual tranche transaction in New Zealand Dollars,” said Andrea Dore, Head of Funding, World Bank. “The dual tranche trade allowed us to reach different investor groups and offer them a high-quality, liquid product. We thank investors for their support of the World Bank’s sustainable development mission to end extreme poverty and boost shared prosperity in member countries.”
Investor Distribution: NZD 1Billion 5.5-Year
By Geography | By Investor Type | ||
New Zealand | 89% | Banks/Bank Treasuries | 93% |
Other | 11% | Central Banks/Official Institutions | 5% |
Asset Managers | 2% | ||
Investor Distribution: NZD 300 Million 10-Year
By Geography | By Investor Type | ||
New Zealand | 92% | Asset Managers | 79% |
Other | 8% | Banks/Bank Treasuries | 21% |
Joint Lead Manager Quotes
“Congratulations to the World Bank for achieving record volumes in both the Kauri and Kangaroo markets in the same month. While we couldn't quite edge our Australian counterparts for top volume this time, the NZD1.3 billion dual tranche Kauri issue is an impressive achievement, nonetheless. This record-breaking transaction once again demonstrates the deep investor support for the World Bank in our market, and justly rewards the World Bank for their commitment to Kauri issuance” said Glen Sorensen, Director Syndicate, ANZ
“An outstanding result for the World Bank, highlighting once again how their regular issuance in the Kauri market sees strong investor support across the curve. To deliver the largest ever Kauri issue of NZD1 billion is impressive enough, but to combine this with a 10-year trade and print a total of NZD1.3 billion is simply brilliant. And to do this at the end of a year in which the World Bank has already issued NZD1.6 billion in Kauri highlights once again the market leading position that the World Bank has in the New Zealand market,” said Mike Faville, Head of Capital Markets, BNZ.
“We are delighted to have assisted the World Bank with a record-breaking Kauri transaction. After so many years as a leading supporter and foundation issuer in the Australian and New Zealand fixed income markets it is terrific to see the team continuing to set new records. This outcome reflects that long-term commitment and the appreciation of the New Zealand and Australian dollar investors for the important work the World Bank is doing,” said Rob Kenna, Head of Programmatic Funding, CBA.
Transaction Summary
| 5.5-year | 10-year |
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) | |
Issuer rating: | Aaa/AAA | |
Amount: | NZD 1,000,000,000 | NZD 300,000,000 |
Settlement date: | December 10, 2020 | December 10, 2020 |
Maturity date: | June 10, 2026 | December 10, 2030 |
Coupon: | 0.75% p.a. payable semi-annually in arrear | 1.25% p.a. payable semi-annually in arrear |
Coupon payments: | June 10 and December 10 in each year | June 10 and December 10 in each year |
Re-offer price: | 99.967736% | 99.448671% |
Re-offer yield: | 0.756% p.a. semi-annual | 1.309% p.a. semi-annual |
Denomination: | NZD 1,000 and multiples thereof (within New Zealand, NZD 50,000 with multiples of NZD 1,000 thereafter) | |
ISIN: | NZIBDDT016C7 | NZIBDDT017C5 |
Clearing systems: | NZ Clear | NZ Clear |
Listing: | Luxembourg Stock Exchange | Luxembourg Stock Exchange |
Joint lead managers: | ANZ Bank New Zealand Limited (ANZ), Bank of New Zealand (BNZ), Commonwealth Bank of Australia (CBA). | |
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 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 Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) 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. The World Bank has been issuing bonds in the international capital markets for over 70 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.
World Bank bonds support the financing of programs that further the Sustainable Development Goals. World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association. The World Bank is also a member of the Executive Committee of the Green Bond and Social Bond Principles. A key priority for the World Bank’s capital markets’ engagement is building strategic partnerships with investors to promote the importance of private sector financing in sustainable development.
Disclaimers
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank". Any offering of World Bank securities will take place solely on the basis of the relevant offering documentation including, but not limited to, the prospectus, term sheet and/or final terms, as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject to restrictions under the laws of several countries, including the laws of New Zealand. World Bank securities may not be offered or sold except in compliance with all such laws.
The net proceeds from the sale of World Bank securities are used to finance sustainable development projects and programs in World Bank’s member countries without being committed or earmarked for lending to, or financing of, any particular projects or programs. Returns on World Bank securities are not linked to the performance of any particular project or program.
Contact
Heike Reichelt
Head of Investor Relations and Sustainable Finance
World Bank Treasury
debtsecurities@worldbank.org
