WASHINGTON, D.C., May 15, 2024 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced the first CHF digital bond by an international issuer, which will settle using Swiss Franc wholesale Central Bank Digital Currency (wCBDC) provided by the Swiss National Bank (SNB). This 7-year CHF 200 million digital bond, the largest World Bank CHF bond issuance since 2009, uses Distributed Ledger Technology (DLT) and advances the digitalization of capital markets while also supporting the financing of World Bank’s sustainable development activities.
The World Bank partnered with the SNB and SIX Digital Exchange (SDX) to further scale efforts in the use of DLT in capital markets. This partnership introduces the use of wCBDC by the SNB for initial settlement. The coupon and redemption payments will be made using tokenized CHF on the SDX. The SDX connects to conventional settlement systems such as Euroclear and Clearstream, via SIX SIS, allowing investors to hold the digital bond through their traditional custodians. The transaction follows the World Bank’s recent digital issuance on Euroclear’s Digital Financial Market Infrastructure (D-FMI) and builds upon its partnerships with core market infrastructure providers to scale digitalization efforts.
The bond is listed on both SIX Digital Exchange and the traditional SIX Swiss Exchange. The securities are governed by Swiss law. The bond was placed mainly in Switzerland, with banks, bank treasuries and corporates representing the majority share of allocations at 60%, followed by asset managers, insurance companies and pension funds at 39%. The remainder was placed with central banks and official institutions.
“We are grateful for the opportunity to issue the first CHF digital bond as an international issuer. This achievement marks another significant step in the World Bank's commitment to increasing capital markets' efficiency through digitalization in partnership with central banks and central securities depositories. It builds on our previous accomplishments with bond-i and the issuance of digitally native notes last October,” said Jorge Familiar, Vice President and Treasurer of the World Bank.
“Being able to settle wholesale transactions in tokenized central bank money is a critical, foundational requirement for the adoption of a blockchain based capital markets infrastructure. Today, the World Bank takes the industry one step forward. SDX is truly delighted to have the World Bank's first CHF-denominated digital issuance settle in wCBDC on our platform as part of the SNB's groundbreaking initiative Project Helvetia. This is further testament of the World Bank's pioneering innovation in the digital asset space," said David Newns, Head SIX Digital Exchange.
Commerzbank was the sole lead manager and is also the paying and issuer agent for this transaction.
“Many congratulations to the World Bank team on today’s CHF outing, breaking a multiyear absence from this market. This digital bond issuance marks another triumph for the World Bank, cementing its position as an avant-garde issuer embracing innovative technologies. The World Bank demonstrated its global investor appeal while transforming the way in which debt capital markets move forward. I am proud of the partnership among World Bank, SNB, SDX and Commerzbank that lead to this groundbreaking success,” said Marie-Claire Ouziel, Global Head of Bonds, Commerzbank.
Transaction Summary
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer rating: | Aaa /AAA (Moody's/S&P) |
Amount: | CHF 200 million |
Settlement date: | June 11, 2024 |
Maturity date: | June 11, 2031 |
Issue price: | 100% |
Issue yield: | 1.1575% p.a. |
Denomination: | CHF 5,000 |
Coupon: | 1.1575% p.a. |
Listing: | SDX Trading AG / SIX Swiss Exchange |
ISIN: | CH1353258168 |
Clearing system: | SIX Digital Exchange AG |
Dealer: | Commerzbank |
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, including under the laws of Switzerland. 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.
Net proceeds of the securities described herein are not committed or earmarked for lending to, or financing of, any particular projects or programs. Payments on the securities described herein are not funded by any project or program.
Contacts
Heike Reichelt, The World Bank
+1 202 477 2880
debtsecurities@worldbank.org
