WASHINGTON, D.C., March 22, 2022 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced two Sustainable Development Bonds, raising a total of USD 4 billion from a USD 1 billion 2-year bond maturing in March 2024 and a USD 3 billion 10-year bond maturing in March 2032.
The transactions attracted over 225 orders totaling more than USD 11.5 billion appealing to investors seeking high credit quality alongside sustainable investment. The dual tranche format, with both shorter and longer points on the yield curve, attracted a globally diverse and broad base of fixed income investors which included central banks, official institutions as well as pension funds, insurance companies and asset managers.
BofA Securities, Deutsche Bank, Goldman Sachs International and J.P. Morgan are the lead managers for both transactions. The bonds will be listed on the Luxembourg Stock Exchange.
The 2-year tranche priced at a spread versus the reference US Treasury of +10.7 basis points, resulting in a semi-annual yield of 2.290%, and the 10-year tranche priced at a spread versus the reference US Treasury of +23.6 basis points, resulting in a semi-annual yield of 2.597%.
“World Bank funding in the capital markets supports its mission to tackle poverty and boost shared prosperity, which includes support to its members for the delivery of essential social services and dedicated financing to protect vulnerable populations,” said Jorge Familiar Vice President and Treasurer, World Bank. “Investors have a critical role to play in channeling resources towards sustainable development. We thank them for their ongoing support, which is especially valued during times when we are supporting our members as they tackle multiple crises.”
Investor Breakdown by Type
| 2-year | 10-year |
Central Banks/Official Institutions | 54% | 54% |
Banks/Bank Treasuries/Corporates | 22% | 31% |
Asset Managers/Insurance/Pension Funds | 24% | 15% |
Investor Breakdown by Geography
| 2-year | 10-year |
Asia | 39% | 52% |
EMEA | 24% | 35% |
Americas | 37% | 13% |
Lead Manager Quotes
“An outstanding result for the World Bank's first US dollar benchmark of this calendar year, taking advantage of the current demand for safe haven assets. Both the combined issue size of 4 billion and the price tightening are testament to the standing the World Bank name has with the global investor community in volatile times," said Adrien de Naurois, Managing Director, Head of DCM SSA & EMEA IG Syndicate, BofA Securities.
“A fantastic outcome for the World Bank’s first US dollar global fixed rate outing of 2022, responding to a slightly more stable market window by re-opening the 10-year sector of the Supranational, Sovereign and Agency (SSA) market, in combination with a rare showing in the 2-year maturity. The strong and diverse nature of the investor demand across the two tranches is testament to the World Bank’s top-tier credit quality and support for its sustainable and inclusive development efforts,” said Katrin Wehle, Managing Director, SSA DCM Origination, Deutsche Bank.
"This was a hugely successful transaction for the World Bank, and we were delighted to be involved. The US dollar primary market has been challenging given the volatility in interest rates and the strength of this transaction is yet another demonstration of the World Bank's standing in the fixed income market. The dual tranche approach allowed for greater investor diversification and the outcome was impressive," said Maud Le Moine, Head of SSA Origination, Goldman Sachs International.
“J.P. Morgan is proud to have assisted in the issuance of the World Bank’s first US dollar benchmark outing in the 2022 calendar year. The 2-year tranche garnered the largest oversubscription (over 6 times at launch) year-to-date, and the 10-year tranche reached USD 3 billion in size despite the challenging macro backdrop and sharp sell-off influenced by rising interest rates. The dual tranche trade once again is proof of the strong market access that the World Bank enjoys even during times of volatility. Congratulations to the World Bank Treasury team!” said Sarah Lovedee, Head of Supranationals DCM, J.P. Morgan.
Transaction Summary
| 2-Year Bond | 10-Year Bond |
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) | |
Issuer rating: | Aaa /AAA | |
Amount: | USD 1 billion | USD 3 billion |
Settlement date: | March 29, 2022 | March 29, 2022 |
Maturity date: | March 28, 2024 | March 29, 2032 |
Issue price: | 99.922% | 99.151% |
Issue yield: | 2.290% semi-annual | 2.597% semi-annual |
Denomination: | USD 1,000 | USD 1,000 |
Coupon: | 2.25% p.a., payable semi-annually in arrear | 2.50% p.a., payable semi-annually in arrear |
ISIN: | US45906M3C38 | US45906M3D11 |
Listing: | Luxembourg Stock Exchange | |
Clearing system: | Fedwire, Clearstream, Euroclear | |
Lead managers: | BofA Securities, Deutsche Bank, Goldman Sachs International and J.P. Morgan | |
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
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.
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.
Contact
Heike Reichelt, The World Bank
+1 202 477 2880
debtsecurities@worldbank.org
