Washington, DC, July 31, 2014 –The World Bank (IBRD, Aaa/AAA) priced today a new long 2-year benchmark raising a total of USD 1.75 billion. The size of the transaction was increased from USD 1 billion which was the initial target on the back of the strong order book primarily driven by central banks. The joint-lead managers for this benchmark are Bank of America Merrill Lynch and RBC Capital Markets.
The 2-year USD transaction carries a semi-annual coupon of 0.750% and matures on December 15, 2016. It offers investors a yield of 0.810%, which is equivalent to a spread of 27.45 basis points over the 0.500% U.S. Treasury note due July 2016.
“We are delighted to have successfully executed this transaction early on as we enter our new fiscal year in response to specific investor demand during this normally quiet season”, said George Richardson, Head of Capital Markets, World Bank Treasury.
This transaction is consistent with the World Bank’s longstanding practice of deploying its franchise as an issuer in the international capital markets to offer investors high-quality, liquid instruments. This approach has direct benefits for World Bank member countries as well, since as a cooperative institution it is able to fund its activities as a provider of financial services to its members on highly attractive terms.
| Investor Distribution | |||
| By Geography | By Investor Type | ||
Americas | 35% | Central Banks / Official Institutions | 59% |
Asia | 32% | Banks / Bank Treasuries / Corporates | 17% |
Europe | 24% | Asset Managers / Pension / Insurance | 24% |
Middle East and Africa | 9% | ||
Transaction Summary:
Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa/AAA
Amount: USD 1.75 billion
Settlement date: August 8, 2014
Coupon: 0.750%
Coupon payment dates: December 15 and June 15 (starting on December 15, 2014, short first coupon)
Maturity date: December 15, 2016
Issue price: 99.861
Issue yield: 0.810%
ISIN: US459058DU42
Listing: Luxembourg Stock Exchange
Clearing system: Fedwire, Euroclear, Clearstream
Joint lead managers: Bank of America Merrill Lynch / RBC Capital Markets
Joint Lead Manager Quotes:
“Great timing by the World Bank here. We’ve experienced some slim summer supply, geopolitical conflicts and wide swap spreads. They’ve used their top credit to supply investors with just the right product and been rewarded with some of the deepest sub-LIBOR pricing we’ve seen for some time”, said Raymond Seager, Head of SSA DCM, BofA Merrill Lynch.
“You can get investors off the beach with the right product from the right name at the right time. An impressive result for World Bank who achieved high quality distribution at the tightest pricing we've seen on a public SSA issue this year. This builds on the positive market momentum since the very successful World Bank October 2016s which priced at MS-6 as recently as June 18”, said Jigme Shingsar, Managing Director, Debt Capital Markets, RBC Capital Markets.
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 World Bank has two main goals: to end extreme poverty and promote shared prosperity. It seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines and by coordinating responses to regional and global challenges. 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).
