WASHINGTON, D.C., January 12, 2022 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 3.5 billion Norwegian krone-denominated Sustainable Development Bond. This transaction is part of the World Bank’s effort to issue Sustainable Development Bonds while highlighting the urgency of mainstreaming climate action.
World Bank bonds support the financing of projects that contribute to climate action. 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. In fiscal year 2021, which ended June 30, 2021, ninety-five percent of all IBRD projects had climate components accounting for 33% of financing.
The NOK 3.5 billion 4.5-year floating-rate bond matures on June 18, 2026. Skandinaviska Enskilda Banken (SEB) acted as lead manager for the transaction. The bond offers a quarterly coupon of 3-month NIBOR + 150 bps and was priced at 106.763%.
Norwegian investors accounted for 86% of the distribution of bond, while Swedish investors comprised the remaining 14%. Banks represented the majority share of allocations at 96%, followed by asset managers and pension/insurance funds at 4%.
Investors in the bond included: Sbanken, Sparebanken Møre, Handelsbanken Asset Management, and Sparebank 1 SR Bank.
Jorge Familiar, World Bank Vice President and Treasurer, said, “We are pleased to return to the NOK market with this Sustainable Development Bond while highlighting the mainstreaming of climate action in all World Bank activities in our engagement with investors. We thank investors for their support of the World Bank’s mission, including our focus on climate.”
Kevin Liang, Senior Portfolio Manager, Handelsbanken AM, said, “More sustainable finance is needed to secure our common future. Handelsbanken supports firmly the World Bank's initiatives for sustainable development.”
Christopher Flensborg, Head of Climate and Sustainable Finance, SEB, said, “The importance of incorporating efficiency and climate considerations across the activities in which we engage cannot be undervalued! It is great to see the World Bank once more taking the lead in showcasing how finance can be used as an instrument to demonstrate the way that best practice should work. SEB is proud to be collaborating with Investors and the World Bank in financing these projects and in driving sustainable financing forward towards continual improvement.”
Transaction Summary
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer rating: | Aaa /AAA (Moody's/S&P) |
Currency: | NOK |
Amount: | NOK 3,500,000,000 |
Settlement date: | January 20, 2022 |
Maturity date: | June 18, 2026 |
Re-offer price: | 106.763% |
Re-offer yield: | DM-5 bps |
Denomination: | NOK 10,000 |
Coupon: | 3-month NIBOR + 150 bps |
Coupon payment dates: | 18 March, 18 June, 18 September, and 18 December in each year, up to and including the Maturity Date |
Listing: | Luxembourg Stock Exchange |
ISIN: | XS2434337031 |
Clearing system: | Euroclear/Clearstream |
Lead manager: | Skandinaviska Enskilda Banken, Stockholm |
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
