WASHINGTON, D.C., August 20, 2024 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced two Sustainable Development Bonds, raising a total of USD 6.5 billion from a USD 3 billion 2-year bond maturing in August 2026 and a USD 3.5 billion 10-year bond maturing in August 2034.
The dual-tranche transaction attracted over 300 orders totaling more than USD 22.7 billion. This represents the World Bank’s largest order book to date. The dual tranche format allowed a wide and diverse set of global bond investors to participate and accommodated a range of investment strategies across both the short and longer ends of the maturity spectrum.
Barclays, BMO, Citi and HSBC are the joint 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 +6.9 basis points, resulting in a semi-annual yield of 4.061%, and the 10-year tranche priced at a spread versus the reference US Treasury of +13.9 basis points, resulting in a semi-annual yield of 3.951%.
“This USD dual tranche issuance is a testament to the global investment community's continuous support for the World Bank.” said Jorge Familiar Vice President and Treasurer, World Bank, “The overwhelming interest for bonds in both maturities with a record-breaking order book for a World Bank transaction underscores the demand for safe and liquid investments combined with the opportunity to foster sustainable development in World Bank member countries.”
Investor Breakdown by Type
| 2-year | 10-year |
Central Banks/Official Institutions | 75% | 43% |
Banks/Bank Treasuries/Corporates | 19% | 31% |
Asset Managers/Insurance/Pension Funds | 6% | 26% |
Investor Breakdown by Geography
| 2-year | 10-year |
EMEA | 44% | 55% |
Americas | 28% | 30% |
Asia | 28% | 15% |
Lead Manager Quotes
“Congratulations to the World Bank team for their first Fixed Rate benchmark of the new fiscal year, with a record-setting dual-tranche USD transaction that secured strong investor demand without compromising on pricing. The deal, which generated the largest ever multi-tranche orderbook for a World Bank transaction whilst pricing at this year’s tightest spread to treasuries - reaffirms the borrower’s leading position in the SSA market and the continuous support from its global investor base. We are honored to have supported this new issue,” said Alex Paterson, Managing Director, Head of SSA DCM, Barclays.
“World Bank has staged a spectacular return to the fixed rate benchmark market. The strategic access to both ends of the maturity spectrum has captured the attention of a massive investor set. The fine-tuned and high-quality allocation process will ensure bond placement into a global and diverse buyer base in driving the World Bank’s mission to support sustainable development activities in member countries. BMO is proud to have been a partner in this transaction and extend our congratulations to the World Bank team,” said Edward Mizuhara, Managing Director, Public Sector Syndicate, BMO Capital Markets.
“Citi is delighted to be part of World Bank’s first fixed rate =USD benchmark of the fiscal year 2025. With this transaction, the World Bank re-opened the post-summer USD market and priced the largest USD SSA deal since April 2021. Impressive distribution to a range of high-quality investors targeting two distinct parts of the curve and capturing a diverse investor bid. Many congratulations to the World Bank funding team!” said Ebba Wexler, Head of SSA DCM, Citi.
"An excellent result for the World Bank team with the issuance of its USD 6.5 billion dual –tranche bonds today, the largest USD SSA transaction since April 2021. The transaction attracted a strong and diverse orderbook across the tranches with combined demand of over USD 22.7 billion. The result highlights the quality and global appeal of the World bank name. HSBC is delighted to have played a role in this transaction," said Asif Sherani, Head of DCM Syndicate and Head of Public Sector DCM, HSBC.
Transaction Summary
| 2-Year Bond | 10-Year Bond |
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) | |
Issuer rating: | Aaa /AAA | |
Amount: | USD 3 billion | USD 3.5 billion |
Settlement date: | August 27, 2024 | August 28, 2024 |
Maturity date: | August 27, 2026 | August 28, 2034 |
Issue price: | 99.884% | 99.377% |
Issue yield: | 4.061% semi-annual | 3.951% semi-annual |
Denomination: | USD 1,000 | USD 1,000 |
Coupon: | 4% p.a., payable semi-annually in arrear | 3.875% p.a., payable semi-annually in arrear |
ISIN: | US459058LK77 | US459058LL50 |
Listing: | Luxembourg Stock Exchange | |
Clearing system: | Fedwire, Clearstream, Euroclear | |
Lead managers: | Barclays Bank, BMO Capital Markets, Citigroup Global Markets, HSBC Bank | |
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 (ICMA) 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, 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 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 project or program.
Contact
Investor Relations and Sustainable Finance, World Bank Treasury, debtsecurities@worldbank.org
