Washington, DC, May 8, 2019 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a new 5-year Sterling Overnight Index Average (SONIA) linked bond adding a second liquid point on its SONIA curve. The GBP 1.25 billion floating rate transaction is World Bank’s second SONIA-linked bond with total raised matching its previous issuance of a SONIA-linked bond in September 2018. Both World Bank SONIA-linked floaters are the largest issued in the market to date.
The successful outcome of the transaction and the number of accounts participating demonstrate once again the solid demand for SONIA-linked assets. Both issuances reflect the World Bank’s commitment to support the developing of a market for LIBOR alternatives and offering investors high quality, liquid assets in those markets.
The high-quality order book of 36 investors included 96% from bank treasuries followed by UK local authorities (2%) and asset managers (2%).
“We are pleased with the exceptionally strong reception for World Bank’s second SONIA-linked bond. The success of this transaction demonstrates investor interest in high-quality liquid investments and speaks to World Bank’s commitment to develop robust alternatives to LIBOR which benefit the global financial system. We appreciate the collaboration of our financial partners and the tremendous enthusiasm of our investors as we continue to move the market forward,” said Jingdong Hua, Vice President and Treasurer, World Bank.
Adrien de Naurois, Managing Director, SSA Syndicate, Bank of America Merrill Lynch, said: “Congratulations to the World Bank team on another outstanding sterling transaction and on successfully extending their SONIA curve. The competitive pricing and diverse orderbook is testament to investors’ ongoing appetite for the World Bank name. The transaction is also a fantastic follow up to their inaugural GBP 1.25 billion SONIA FRN in October and demonstrates World Bank’s continued support for this developing market.”
Asif Sherani, MD, Head of SSA Syndicate, HSBC, said: “World Bank cemented its position as a leader in the Sterling market today printing the largest SONIA floater we've seen year to date, in a year where supply has been at record levels. The deal was well timed, tapping into strong appetite and allowing a print of large size with minimal concession. World Bank’s choice of a floating rate note and SONIA as a reference rate demonstrates its continued push to develop the floating rate markets in face of LIBOR transition discussions.”
Mark Byrne, Director, SSA Syndicate, TD Securities, said: "With this transaction, the World Bank has demonstrated their market-leading presence in the GBP market. By adding a second liquid point on their SONIA curve and issuing a GPB 1.25 billion sized bond, this is an exceptional result for the issuer. This transaction once more highlights the persistent bid for World Bank bonds across all markets from the global investor community."
Investor Distribution | |||
By Geography |
| By Type |
|
United Kingdom | 86% | Banks/Bank Treasuries | 96% |
United States | 8% | Official Institutions | 2% |
Europe | 6% | Asset Managers | 2% |
Transaction Summary* | |
Issuer | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer rating | Aaa/AAA |
Maturity | 5-year |
Amount | GBP 1.25 billion |
Settlement date | 15 May 2019 |
Floating rate reference | Compounded Daily SONIA, as defined in the applicable final terms |
Coupon | Compounded Daily SONIA +27bps, 5-day observation lag |
Coupon payment dates | Quarterly, every 15 February, 15 May, 15 August and 15 November, from and including 15 August 2019 to and including the Maturity Date |
Maturity date | 15 May 2024 |
Issue price | 100% |
Listing | Luxembourg Stock Exchange |
Clearing systems | Euroclear/ Clearstream |
ISIN | XS1995762082 |
Joint Lead Managers | Bank of America Merrill Lynch, HSBC, TD Securities |
* 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 Joint Lead Managers 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.
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 https://treasury.worldbank.org.
Contact
Heike Reichelt, debtsecurities@worldbank.org
