WASHINGTON, D.C., February 7, 2023 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a 7-year benchmark bond that matures in February 2030. The Sustainable Development Bond raised USD 5 billion to support the World Bank’s mission to combat poverty and boost shared prosperity in developing countries as they continue to navigate multiple crises.
The transaction, which represents the first USD 7-year benchmark in the Sovereign, Supranational, and Agency (SSA) sector in 2023, attracted 152 orders totaling more than USD 8.4 billion appealing to investors seeking high credit quality and a sustainable investment. The transaction attracted global interest from a diverse investor group with significant participation from banks, central banks, and asset managers, among others.
Barclays, BofA Securities, HSBC Bank plc, and J.P. Morgan are the lead managers. The bond, which will be listed on the Luxembourg Stock Exchange, offers a spread versus mid-swaps of +47 basis points, equivalent to +16.91 basis points versus the reference US Treasury, and has a semi-annual yield of 3.897%.
“We are very pleased to be back in the USD market in the 7-year space and see strong investor demand,” said Jorge Familiar, Vice President and Treasurer, World Bank.“We appreciate investors’ support for the transaction and the sustainable development activities of the World Bank as we work with member countries to boost resilience and support the poor and vulnerable as countries deal with severe economic, climate, and social challenges amid worsening inequality.”
Investor Distribution
By Investor Type | By Geography | ||
Banks/Bank Treasuries/Corporates | 46% | EMEA | 52% |
Central Banks/Official Institutions | 41% | Asia | 29% |
Asset Managers/Insurance/Pension Funds | 13% | United States | 13% |
|
| Americas (ex USA) | 6% |
Lead Manager Quotes
“The World Bank has once again delivered an immensely successful transaction in its first outing in the USD market this year, whilst also establishing the first 7-year for the SSA sector in 2023. The high-quality, granular order book, in excess of USD 8.4 billion, is a vote of confidence in the World Bank team's accurate market view and precise assessment of fair value. Barclays was honored to have been able to support this transaction and the critical mission of the World Bank,” said, Lee Cumbes, Head of DCM and Public Sector, EMEA, Barclays.
“Congratulations to the World Bank team on an outstanding first USD benchmark of this calendar year. Despite a busy primary backdrop, the transaction was met with exceptional investor demand allowing the issuer to both tighten 2 basis points and print an upsized USD 5 billion transaction, a strong testament the World Bank’s credit quality and investor support for its sustainable development efforts,” said, Kamini Sumra, Managing Director, SSA Origination, BofA Securities.
“We would like to congratulate the World Bank on taking advantage of a constructive market backdrop and achieving an excellent outcome. The World Bank showcased its position as a household name in the SSA market, being the first issuer to access the 7-year tenor in USD in 2023, and for a USD 5 billion transaction. The deal was well supported by a high-quality USD 8.4 billion orderbook. We are very proud to have been involved at HSBC,” said, Asif Sherani, Head of DCM Syndicate, EMEA, HSBC.
“The World Bank returned to the USD benchmark market for the first time in the 2023 calendar year with an impressive USD 5 billion 7-year Sustainable Development Bond– the largest 7-year transaction from the issuer since 2021, and also the first 7-year USD SSA trade of the year. A high-quality orderbook of over USD 8.4 billion is a testament to the World Bank’s solid standing among the global investor community, and further evidence of the issuer’s deep access to the capital markets. J.P. Morgan is delighted to have been involved,” said, Keith Price, Head of Frequent Borrower Group, J.P. Morgan.
Transaction Summary
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer rating: | Aaa /AAA |
Amount: | USD 5 billion |
Settlement date: | February 14, 2023 |
Maturity date: | February 14, 2030 |
Issue price: | 99.866% |
Issue yield: | 3.897% semi-annual |
Denomination: | USD 1,000 |
Coupon: | 3.875% p.a., payable semi-annually in arrear |
ISIN: | US459058KQ56 |
Listing: | Luxembourg Stock Exchange |
Clearing system: | Fedwire, Clearstream, Euroclear |
Lead managers: | BofA Securities, Barclays, HSBC Bank plc, and J.P. Morgan |
Senior co-lead managers: | CastleOak Securities, L.P., National Bank of Canada Financial Inc., Scotiabank Europe plc, and Wells Fargo Securities, LLC |
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, the World Bank’s Sustainable Development Bond Impact Report, and the information set forth therein are not a part of, or incorporated by reference into, the offering documentation.
Contact
Investor Relations and Sustainable Finance
World Bank Treasury
debtsecurities@worldbank.org
