World Bank Prices Dual Tranche AUD 800 Million Kangaroo Bonds While Highlighting Climate Action

WASHINGTON, October 13, 2021 – The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) today priced a new long-dated 5-year AUD 500 million Sustainable Development Bond and a tap of its existing November 2030 Sustainable Development Bond (bringing its total outstanding to AUD 1 billion). This transaction is part of the World Bank’s initiative to issue Sustainable Development Bonds while highlighting the urgency of mainstreaming climate action.

Since announcing the initiative, the World Bank has been engaging with investors to explain how its bonds support the financing of projects that contribute to climate action and how the World Bank’s updated Climate Change Action Plan helps countries integrate climate change into their development strategies and apply climate financing in ways that achieve the most positive impact. Applying a “whole of economy” approach with developing country clients helps the World Bank mainstream climate considerations across its portfolio, including in high emitting sectors as well as sectors not typically associated with climate action such as health, education, and trade. In fiscal year 2021, which ended June 30, 2021, ninety-five percent of all IBRD projects had climate components accounting for 33% of financing.

“We are excited to return to the Kangaroo market which has provided great support for the World Bank and its sustainable development mission over the years,” said Andrea Dore, Head of Funding, World Bank Treasury.“This dual tranche transaction provided an opportunity to engage investors with different maturity needs while highlighting how the proceeds from the Sustainable Development Bonds are used to support the financing of projects that contribute to climate action in developing countries.”

Investor Distribution: AUD 500 million Long 5-Year

Investor Distribution: AUD 300 Million Tap of 10-Year

Joint Lead Manager Quotes

“Today’s dual tranche Sustainable Development Bond Kangaroo issue is an outstanding result for the World Bank. The highly granular orderbook reaffirms the strong sponsorship the World Bank holds in the Australian market. The World Bank’s newly updated Climate Change Action Plan has resonated strongly with the Australian dollar investor community, with many accounts pointing to the new initiative in helping to highlight the importance of achieving positive climate impacts,” said Charles Davis, Managing Director, Sustainable Finance, Commonwealth Bank of Australia.

“An incredible outcome for the World Bank’s first Kangaroo dual-tranche benchmark bond this calendar year. The pricing of Asset Swap +18 basis points for the new 5.5-year line was also the tightest print for a Supranational, Sovereign and Agency (SSA) bond in the 2027 tenor. The combination of strong demand, quality of the orderbook and fine pricing is a testament to the World Bank’s perception as the ultimate supranational benchmark in the Kangaroo market. Deutsche Bank is honored to have supported the World Bank in this transaction and its important sustainable development mission,” said Craig Johnston, Director, Head of Australia & New Zealand Syndicate, Deutsche Bank.

“The new 5.5 year and the tap of the 2030 represent the World Bank’s focus on enfranchising both intermediate and long-end investors, and serves as another milestone in their 22 years of issuing in the Kangaroo market. Their Sustainable Development Bonds continue to promote awareness of the World Bank’s mandate and are incredibly well received as the global investor community increasingly looks to focus on sustainable assets,” said Oliver Holt, Head of Non-Japan Asia Debt Syndicate, Nomura.

“J.P. Morgan was delighted to be involved with the World Bank’s first Kangaroo benchmark of its new fiscal year, a successful dual-tranche trade which stands out as the largest SSA AUD issuance in a single outing since January this year. The reoffer spreads achieved were the tightest for both tenors in the SSA space year-to-date, and stronger-than-expected demand for the November 2030’s line allowed the issuer to bring the total outstanding amount to AUD 1 billion. Well done to the World Bank team,” said Ryan Chamberlain, Head of AUD Syndicate, J.P. Morgan.

Transaction Summary¹

¹ On October 13, 2023, IBRD agreed to increase the principal amount with a fourth tranche in the amount of AUD 200 million with an issue price of 77.017% (settlement date: October 24, 2023). The new total outstanding principal amount is AUD 1.5 billion.

For more information on the World Bank Group and Climate Action: https://www.worldbank.org/en/topic/climatechange

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.

World Bank bonds support the financing of programs that further the Sustainable Development Goals (SDGs). World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association and as such support the financing of a combination of green and social, i.e., “sustainable development” projects, programs and activities in IBRD member countries as described in the World Bank Sustainable Development Bond Framework. The World Bank is also a member of the Executive Committee of the Green Bond, Social Bond, and Sustainability 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. The World Bank’s Sustainable Development Bond Impact Report describes how the World Bank engages with investors on the SDGs and raises awareness for specific development challenges.

Disclaimers

Net proceeds of the bonds described herein are not committed or earmarked for lending to, or financing of, any particular projects or programs, and returns on the bonds described herein are not linked to the performance of any particular project or program.

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. World Bank securities may not be offered or sold except in compliance with all such laws. The World Bank Sustainable Development Bond Framework and the information set forth therein are not a part of, or incorporated by reference into, the offering documentation.

Contact

Heike Reichelt, Head of Investor Relations and Sustainable Finance
World Bank Treasury
debtsecurities@worldbank.org