Washington, DC, January 14, 2014 - Today, the World Bank (International Bank for Reconstruction and Development, IBRD, rated Aaa/AAA) launched a USD 550 million 18-month floating rate World Bank Green Bond. World Bank Green Bonds support World Bank’s lending to eligible development programs that are designed to address the challenges of climate change in the developing world.
This transaction is the first syndicated Green FRN from the World Bank and amongst the Sovereign/Supranational/ Agency community. The bonds were placed with a group of investors, including but not limited to Blackrock, TIAA-CREF, Goldman Sachs Private Wealth Management. In addition to the traditional investment considerations such as safety of investment and risk-adjusted returns, all investors purchased the bonds due to their interest in supporting climate-friendly projects within their investment mandates.
Bank of America Merrill Lynch, Goldman Sachs International and SEB are the joint-lead managers for this transaction.
“We are very encouraged to see the continuing growth and development of the green bond market that the World Bank helped pioneer to mobilize increased private capital flows to climate-focused projects that can help promote low carbon economic growth. We are grateful for the support from investors, banks, issuers and others who are working with us and others to help expand this market and work towards a goal that benefits us all," says Doris Herrera-Pol, Director and Global Head of Capital Markets at the World Bank.
“World Bank has spent a considerable amount of time over a number of years developing the green bond product and the investor base. It’s great to see them pushing this further with the first large floating rate trade and bringing new investors into the asset class as a result“, says Raymond Seager, Head of SSA DCM at BofA Merrill Lynch.
“We are pleased to be involved in this transaction. The fact that this is the first Green bond executed in a syndicated FRN format points to continued product diversification in this space which should be welcome by SRI investors around the world,” says Martin Weber, Head of Sovereign/Supranational/Agency and Growth Markets Origination at Goldman Sachs International. “We see increasing interest in SRI investments from our global client base and we expect more interest in this area going forward.” says Meena Flynn, Global Head of the Market Solutions Group of Goldman Sachs Private Wealth Management.
“It is with great pleasure that SEB together with the World Bank and leading investors continue to build the green bond market. We believe this transaction, as the first USD Green Bond transaction of the year, will lay the foundation for a continued development of the Green bond Market in 2014,” says Christopher Flensborg, Head of Sustainable Products and Product Development at SEB.
The first World Bank green bond was issued in 2008, responding to requests from large institutional investors looking for a liquid, plain vanilla product that explicitly supports the financing of climate-related projects. Since then, the World Bank has mobilized over USD 4.5 billion equivalent through 60 green bond transactions that support the financing of eligible projects in its borrowing member countries around the world. Examples of the types of projects supported by World Bank Green Bonds include renewable energy installations, energy efficiency projects, new technologies in waste management and agriculture that reduce greenhouse gas emissions, forest and watershed management, and infrastructure to prevent climate-related flood damage.
Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Amount: USD 550 million
Settlement date: January 22, 2014
Maturity date: July 22, 2015
Issue price: 100%
Coupon: 3-month US$ Libor – 6bps quarterly
Denomination: USD 1,000
Listing: Luxembourg Stock Exchange
Joint-Lead Managers: Bank of America Merrill Lynch, Goldman Sachs International and SEB
ISIN: US45905UNQ30 / Common Code 101949516
For more information on World Bank Green Bonds, please see the World Bank’s dedicated green bond investor page at: https://treasury.worldbank.org/greenbonds
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 operates as a global development cooperative owned by 188 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The overriding goal is to achieve major, sustainable improvements in standards of living worldwide. It has been issuing bonds in the international capital markets for over 60 years to fund its activities. Information for investors is available on the World Bank Treasury website: (https://treasury.worldbank.org/capitalmarkets).