WASHINGTON, D.C., July 18, 2023 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) initiated its 2024 fiscal year funding program with the pricing of a 7-year benchmark bond that matures in July 2030. The Sustainable Development Bond raised USD 3 billion to support the World Bank’s sustainable development activities including efforts to tackle intertwined challenges of jobs, climate, fragility, and pandemics.
The transaction attracted approximately 100 orders totaling more than USD 4.25 billion led by a high concentration of global private investors including bank treasuries and asset managers. They were joined by central banks and other official institutions among other groups, as well as several first-time investors who were attracted by the World Bank’s triple-A credit quality, liquidity, and the use of their funds for sustainable development.
The lead managers are BMO Capital Markets, Bank of America Securities, J.P. Morgan, and Morgan Stanley & Co International Plc. The bond will be listed on the Luxembourg Stock Exchange and offers a spread versus the reference US Treasury of +16.2 basis points and has a semi-annual yield of 3.871%.
“We are grateful for the strong show of support from globally diverse investors in our first benchmark transaction of the fiscal year,” said Jorge Familiar Vice President and Treasurer, World Bank. “Private investors are a fundamental component of the World Bank’s business model which leverages shareholder capital from 189 countries in order to provide financing to developing countries to meet their sustainable development goals.”
Investor Distribution
By Investor Type | By Geography | ||
Central Banks/Official Institutions | 36% | Asia | 16% |
Banks/Bank Treasuries/Corporates | 49% | Americas | 34% |
Asset Managers/Insurance/Pension Funds | 15% | Europe / Middle East/ Africa | 50% |
Lead Manager Quotes
An impressive result for the World Bank to kick start its US dollar issuance for this fiscal year with a $3 billion 7-year benchmark and achieving tighter pricing versus both mid-swap and the US Treasury than its USD 7-year in February. The high quality and diverse demand totaling over $4.25 billion, and participation from approximately 100 investors is a testament to the depth and breadth of World Bank’s global investor reach, as well as support for its sustainable development mission. Congratulations to the World Bank team. J.P. Morgan is delighted to be involved in this transaction,” said Keith Price, Head of Frequent Borrower Group, J.P. Morgan.
“Excellent timing and flawless execution helped the World Bank achieve an impressive first outing to start their 2024 fiscal year transaction. Final orderbook closing in excess of $4.25 billion demonstrates the high confidence from the investor base in the organization, and IBRD’s strong ability to access the market. The execution window allowed the IBRD team to capitalize on the recent improvement in macro tone and bring this transaction ahead of upcoming central bank policy meetings. Bank of America was delighted to be part of this transaction,” said Adrien de Naurois, Head of SSA & EMEA IG Syndicate, Bank of America.
“Congratulations to the World Bank team on a successful return to the dollar market with its first US dollar Sustainable Development Bond of the new fiscal year, adding another point to their already liquid, well populated curve. Today’s issuance underscores the World Bank’s strength as an issuer, as exhibited by the strong demand received from both central banks and bank treasuries. We are delighted to have been involved in this transaction,” said Ben Adubi, Executive Director & Head of SSA, Morgan Stanley.
“The World Bank opens its new fiscal year with an impressive outing in the undersupplied 7-year tenor, driven by high quality demand from its diverse investor following. The global buyside investor community continues to jump at the opportunity to invest for impact in liquid, World Bank bonds,” said Sean Hayes, Managing Director & Head of US Syndicate, BMO Capital Markets.
Transaction Summary
| 7-Year Bond |
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer rating: | Aaa /AAA |
Amount: | USD 3 billion |
Settlement date: | July 25, 2023 |
Maturity date: | July 25, 2030 |
Issue price: | 99.800% |
Issue yield: | 4.033% semi-annual |
Denomination: | USD 1,000 |
Coupon: | 4.00% p.a., payable semi-annually in arrear |
ISIN: | US459058KU68 |
Listing: | Luxembourg Stock Exchange |
Clearing system: | Fedwire, Clearstream, Euroclear |
Lead managers: | BMO Capital Markets, BofA Securities, J.P. Morgan, Morgan Stanley & Co International Plc |
Senior co-lead managers: | Citigroup, Scotiabank, CastleOak, National Bank of Canada Financial |
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. Payments on the bonds described herein are not funded by 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 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
Heike Reichelt, The World Bank
+1 202 477 2880
debtsecurities@worldbank.org
