Washington, D.C, April 4, 2019—The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) launched a Sustainable Development Bond to draw attention to the challenge of plastic waste pollution in oceans. This bond is part of an ongoing initiative by the World Bank to engage with investors on highlighting the vital role of fresh and saltwater resources.
This callable step-up fixed rate bond, which was targeted at both institutional and individual investors, priced on April 2, 2019 and raised US$10,000,000.
Morgan Stanley & Co. LLC. was the sole distributor of the bond.
“Freshwater and marine ecosystems cover more than three-quarters of the earth’s surface and provide critical services—from habitats and drinking water to climate control. We greatly appreciate the partnership with the diverse range of investors that continue to support bonds issued under this theme,” said George Richardson, World Bank Director for Capital Markets.
“This transaction epitomizes the World Bank’s innovation in the capital markets. ,” said Navindu Katugampola, Head of Sovereign, Supranational & Agency Origination, Morgan Stanley.
“,” said Audrey Choi, Morgan Stanley Chief Sustainability Officer and CEO of the Morgan Stanley Institute for Sustainable Investing.
With annual issuances between US$40-US$50 billion, all World Bank bonds support the financing of programs that support the Sustainable Development Goals. World Bank bonds are aligned with the sustainability bond guidelines published by the International Capital Markets Association (ICMA). The World Bank is also a member of the Executive Committee of the Green Bond Principles. A key priority for the World Bank’s engagement in the capital markets is to build strategic partnerships with investors to raise awareness for the role of private sector financing in sustainable development.
According to Scientific American, eight million tons of plastics are dumped in the ocean each year – that is about one truck of garbage per minute. In addition to the environmental damage, the financial toll is huge. Marine ecosystems globally suffer an estimated US$13 billion a year in damages caused by plastic waste impacting tourism, fishing, shipping, health and food chains.
The World Bank plays a crucial convening role in multi-sectoral efforts to beat plastic pollution. These efforts include:
- Supporting analytical studies which identify important gaps in infrastructure as well as behavior change.
- Supporting policy reforms and financing investments in solid waste management.
- Strengthening regulatory reforms and fiscal mechanisms.
- Leveraging private sector investment and blended financing models.
- Facilitating coordination and collaboration.
- Fostering global best practices and knowledge sharing.
The thematic bond initiative was launched in August 2018. Since then, a range of institutional and retail investors globally have supported the initiative. This bond brings issuances under the theme to more than US$990 million (equivalent) raised through 19 bonds issued in nine currencies. Investors all voiced strong support for the strategic focus on SDG 14 (Life Below Water) and SDG 6 (Clean Water & Sanitation).
The World Bank will continue to issue bonds under the initiative.
Transaction Summary* | |
Issuer | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer Rating | Aaa/AAA |
Amount | US$10 million |
Settlement Date | April 24, 2019 |
Maturity Date | April 24, 2022 |
Issue Price | 100% |
Coupon (per annum) | Step Up Schedule: Year 1: 2.35% Year 2: 2.70% Year 3: 3.15% |
Interest Payment Dates | April 24 and October 24 of each year, from and including October 24, 2019 to and including the Maturity Date (unless called earlier) |
Call Dates | April 24 and October 24 of each year, from and including April 24, 2020 to and including October 24, 2021 |
Denomination | US$1,000 and integral multiples of US$1,000 in excess thereof |
Clearing System | DTC |
Lead Manager | Morgan Stanley & Co. 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.
* This press release is not an offer for sale of bonds of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank". Any offering of the bonds will be made only by means of a prospectus containing detailed information that will made available through Morgan Stanley & Co. LLC., and is subject to restrictions under the laws of several countries. Securities may not be offered or sold except in compliance with all such laws.
Net proceeds of the bonds are not committed or earmarked for lending to, or financing of, any particular projects or programs and returns on the bonds are not linked to the performance of any particular project or program.
