Washington, DC, March 13, 2014 – Today, the World Bank (International Bank for Reconstruction and Development, IBRD, rated Aaa/AAA) launched a EUR 550 million 3-year fixed rate global green bond, its inaugural green benchmark in this currency and its second green bond of the year. World Bank Green Bonds support its lending to eligible development programs that are designed to address the challenges of climate change.
With today’s issue, the World Bank continues to attract new investors and expand the investor base for the green bond market, marking another important milestone. The World Bank has now issued a total of USD 5.3 billion equivalent in green bonds since its inaugural green bond in 2008.
The bonds were placed with 21 investors, including Aegon Asset Management, AP2, APG, Barclays Treasury, Blackrock, Caisse Centrale de Reassurance, Ikea Group, Mirova, Natixis Asset Management, Pictet, SEB Asset Management, SNS Asset Management, Standish Mellon Asset Management Company LLC, Zurich Insurance Group and Zwitserleven. 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.
“The green bond issued by the World Bank fits within our existing mandate guidelines and our impact investing approach in which we select investments that meet our existing risk and return requirements, but also have the intent to create a measurable social or environmental impact. We think the market for green bonds will grow considerably in coming years as the appetite from investors is more than sufficient to cover an increasing issuance level." says Hendrik-Jan Tuch, Senior Portfolio Manager, Aegon Asset Management.
“In line with its mission and vision, SNS AM is very committed to responsible investment and green bond investing in particular. SNS AM is very pleased to participate in this particular World Bank deal to continue to assist its clients like Zwitserleven in their search for responsible investments,” says Erik Jan van Bergen, CIO SNS Asset Management.
The distribution by investor type and geography was as follows: 42% of the bonds were placed with bank treasuries and corporates, 22% with asset managers, 19% with insurance companies, 9% with official institutions, and 8% with pension funds; 90% of the bonds were placed with European investors, and 10% with investors in the Americas.
Crédit Agricole CIB, Morgan Stanley and SEB are the joint-lead managers for this transaction.
“This is a landmark transaction - it is the World Bank's first green bond benchmark in Euros, which expands the green bond investor base in Europe. We are very pleased to continue to offer liquid products to help build the green bond market that mobilizes private sector financing for climate-friendly projects. We are grateful for the support from investors, banks, issuers and others who are working together to help expand this market and work towards a goal that benefits all of us," says Madelyn Antoncic, Treasurer and Vice President, World Bank.
The World Bank issued its first green bond 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 USD 5.3 billion equivalent through over 60 green bond transactions in 17 currencies to 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.
"With this inaugural EUR denominated green bond, the World Bank continues to affirm its leading status in channeling responsible investments into tackling climate change issues that directly impact developing countries. This key development is a true milestone both for the expansion of World Bank's footprint in the capital markets and for the benefit of the responsible issuers and investors community, and Crédit Agricole CIB is delighted to have been associated with it," says Tim Hall, Global Head of Debt Capital Markets at Crédit Agricole CIB.
"The World Bank has been a market leader in broadening the scope of the green bond product, while maintaining its focus on investors that support the goal of addressing climate change. Morgan Stanley is proud to have partnered with the World Bank in both its inaugural EUR and USD green bond benchmarks. We look forward to continuing our work together in developing this important market," says Claus Skrumsager, Co-Head of Global Capital Markets in EMEA at Morgan Stanley.
"This transaction sets another milestone for green bonds - we have seen several first time buyers and a number of accounts have used this transaction to activate internal strategies. The World Bank continues to lead the financial society into climate finance," says Joakim Alpen, Global Head of Markets at SEB.
Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa/AAA
Amount: EUR 550 million
Settlement date: March 20, 2014
Coupon payment dates: March 20 (annual)
Maturity date: March 20, 2017
Issue price: 99.678%
Issue yield: 0.358%
Listing: Luxembourg Stock Exchange
Clearing system: Euroclear, Clearstream
Joint lead managers: Crédit Agricole CIB, Morgan Stanley and SEB
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 on bonds for investors is available on the World Bank Treasury website: (www.worldbank.org/debtsecurities).