Tokyo, June 28, 2007 – The World Bank (International Bank for Reconstruction and Development - IBRD, rated AAA/Aaa) has launched a set of emerging market local currency bonds that will be purchased for a new investment fund offered by Nikko Asset Management Co., Ltd. (Nikko AM).
The Nikko AM fund for Japanese investors is called the “World Bank Bond Fund (Monthly Dividend Payment Type)” (short name: World Supporter) and is the first fund comprised principally of World Bank bonds in a variety of emerging market currencies. The fund offers Japanese investors the opportunity to participate in a diversified emerging market investment portfolio which will support the mission of the World Bank.
For the inauguration of the fund, the World Bank launched ten bonds denominated in, or linked to, emerging market currencies, including Brazilian Reais, Hungarian Forint, Indian Rupee, Mexican Pesos, New Turkish Lira, Russian Rubles, and South African Rand. The fund will also have bonds issued in Euros and US Dollars to support the diversification and liquidity of the product.
Initial subscriptions to this open-ended fund have been collected by Chiba Bank, but going forward and as the fund grows, other banks will be able to participate in the sale of the fund to their clients.
Tadashii Takeyama, President of Chiba Bank, said, "We started the sale of the fund on June 5, 2007, and immediately got a great response from our clients. The total subscription amount for the initial launch of the fund reached over JPY 17 billion -- a record amount for the launch of a new fund. This is the first fund created in collaboration with the World Bank. It is comprised of short-dated bonds mainly denominated in emerging market currencies, and the fund pays a monthly dividend that is popular among our clients. Additionally, through this fund, investors can help support the future of these and other countries. All of these factors combined will make this fund attractive for Japanese clients who can earn a financial return as well as help improve life for many around the world.”
As of the end of the initial subscription period for the fund, the total subscription amount was JPY 17.075 billion (approximately US$139 million). “This is an extremely good result for the launch of a new fund and exceeds our original expectations. It shows that Japanese investors are eager to support the future of developing countries and are grateful to the World Bank for its help to Japan many years ago," said Nikko AM Chairman and CEO Timothy F. McCarthy, who also said “that with this socially responsible investment opportunity, investors can contribute to the World Bank’s sustainable development efforts.”
“We’re pleased to work together with Nikko AM in connection with this innovative product. It allows Japanese investors to participate even more fully in the World Bank’s efforts to help improve the lives of people in its member countries. At the same time, investors will benefit from an investment focused on World Bank bonds,” said Kenneth G. Lay, the World Bank Treasurer.
The World Bank utilizes the funds raised through the issuance of its bonds to finance its development activities, which encourage and support sustainable economic growth and improve the living standards of people in developing countries. For example, the World Bank provides financing for education, health and environment projects, and for basic infrastructure in its borrowing member countries.
In addition to the social contribution that the World Bank Bond Fund makes, Nikko AM has announced that they will donate a certain percentage of the management fees generated from the sale of the World Bank Bond Fund to funds or international entities that focus on supporting developing countries in areas such as healthcare or education, especially for children. Nikko AM Chairman and CEO Timothy F. McCarthy said “Nikko AM, as a business and as an asset management company, is cognizant of its need to give back to society and is proud to be a leader in this area. We aim to continue to maintain the confidence of individual investors as an SRI leader in Japan and to provide high-quality asset management services.”
World Bank Treasury, Tokyo: Yoshiyuki Arima, Senior Financial Officer, tel. +81-(03) 3597-6650
Nikko AM, Tokyo: Naho Yohda / Aiko Takemiya / Naomi Toyomitsu, Corporate Communications Dept., tel. +81-(03)-5157-6221; firstname.lastname@example.org
(see also: https://www.nikkoam.com/english/)
About the World Bank
The World Bank is a global development cooperative owned by 185 member countries. Its purpose is to help its members achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global problems in economic development and environmental sustainability, all with a view to overcoming poverty and improving standards of living for people worldwide.
To fulfill its mandate, the World Bank Group, working through four specialized entities, provides its members with financial services (loans, equity investments, risk management tools and credit enhancement), access to experts and a pool of knowledge in development-related disciplines and convening and strategic services to help members pool, administer and prioritize resources they dedicate to development-related objectives.
The International Bank for Reconstruction and Development (IBRD), rated Aaa/AAA, is the oldest and largest entity in the World Bank Group and provides funding, risk management tools and credit enhancement to sovereigns. To fund this activity, IBRD has been issuing debt securities in the international capital markets for 60 years. The World Bank’s mission to fight poverty and its investments in sustainable development, including in education, health and environment, makes IBRD bonds suitable for socially responsible investors. The World Bank is also the Treasury Manager for the International Finance Facility for Immunisation (IFFIm), the world’s first multilateral issuer that provides grants for a specific development purpose – health and immunization programs.
The World Bank has gained recognition as one of the markets’ most innovative borrowers. It pioneered the currency swap in 1981, the first global bond (1989) and the first fully electronic bond offering (2000), among other “firsts.” It was IFR’s “Borrower of the Decade” for the 1980s and recognized by bankers in a recent EuroWeek poll as “Most Innovative Borrower over the last 20 years.”
In 2006 the World Bank raised US$10 billion in medium- to long-term funding. The World Bank’s debt products are offered in a variety of currencies and include large bonds distributed globally as well as bonds tailored to retail or institutional investors in specific markets. World Bank debt products provide investors with the assurance of a superior credit rating, a wide choice of products and strong secondary market performance for liquid World Bank global bonds. The World Bank also customizes its debt offerings to meet investors' specific asset and liability needs.
The World Bank's bond products and investor presentation can be accessed through the website of the World Bank for bond investors (www.worldbank.org/debtsecurities). For a list of selected bonds issued recently by the World Bank, see: https://treasury.worldbank.org/recentissues.