Washington, DC, February 19, 2015 – Today, the World Bank (International Bank for Reconstruction and Development, IBRD, rated Aaa/AAA) launched a USD 600 million 10-year fixed rate global green bond, its largest USD green bond and also its longest-dated green benchmark in this currency. 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 nearly USD 8 billion equivalent through over 80 green bond transactions in 18 currencies since its inaugural green bond in 2008. 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.
The bonds were placed with 25 investors including AP2, AP4, Blackrock, Deutsche Bank Treasury, Mirova, Nikko Asset Management, Nippon Life Insurance Company, Praxis Intermediate Income Fund, Trillium Asset Management, United Nations Joint Staff Pension Fund and Zuercher Kantonalbank. The distribution by investor type and geography was as follows: 43% of the bonds were placed with asset managers, 31% with bank treasuries and corporates, and 26% with pension and insurance companies; 39% of the bonds were placed with investors in the Americas, 28% in Europe, 17% in MENA, and 16% in Asia.
Deutsche Bank, Morgan Stanley and SEB are the joint-lead managers for this transaction.
Blackrock’s Ashley Schulten, Director, Portfolio Manager, said "IBRD’s effort in moving forward robust impact reporting on its green bond program is impressive. We view this as an important component of our green bond evaluation. Blackrock has been a strong supporter of World Bank Green Bonds in the past, and this pioneering work on reporting standards was a key factor behind our involvement in today's 10-year bond."
“Deutsche Bank is pleased to launch its Green Bond Portfolio with an investment in the first ten-year maturity USD green bond benchmark issued by the World Bank. Landmark green issuances from triple-A issuers such as the World Bank further enhance the appeal of the green bond market, promoting investment in sustainable projects that mitigate the effects of climate change at commercially appealing returns,” said Alex von zur Muehlen, Group Treasurer of Deutsche Bank.
"If established on firm footing, Mirova is convinced that the green and social bond market can become an essential tool for financing solutions to the challenges of sustainable development. IBRD's green bond is of particular interest considering its focus on climate change. We not only appreciate IBRD's green bond for its ability to fight climate change, but also because it features good practices that remain rare in the market. An adequate level of transparency is notably essential for maintaining the value-added of sustainability bonds for investors, which resides in the measure of impact that they offer. IBRD provides a regularly updated report, which allows investors to maintain visibility on the list of financed projects," said Marc Briand, Head of Fixed Income at Mirova.
“We are happy to continue to support World Bank Green Bond issuance, as this provides both a high-quality investment and has a positive environmental impact,” said Andrew Severino, Head of Fixed Income US & Europe at Nikko Asset Management.
“The World Bank continues their strong leadership position in the green bond market. We are happy to continue our work with them to show that bonds really can have a positive impact and make a difference in our world,” said Benjamin J. Bailey, Fixed Income Investment Manager, Praxis Intermediate Income Fund.
“We know that every investment across every asset class has social and environmental impacts — positive and negative,” said Cheryl I. Smith, Ph.D., CFA, Managing Partner of Trillium Asset Management. “The ability to make investments in triple-A rated World Bank Green Bonds gives us confidence that our clients’ funds will be directed to carbon footprint reduction and improved energy efficiency projects.”
“The United Nations Joint Staff Pension Fund is pleased to enhance its commitment to green bonds,” said Carol Boykin, Representative of the Secretary-General. “This follows our recent investment in two new low carbon ETFs, LOWC and CRBN, respectively. We believe in making investments which are economically sound and beneficial to the environment.”
“We are particularly happy with this new addition to our Green Bond program. It not only the longest dated Green Bond benchmark for us, but it is also our largest USD green bond. Both these milestones reflect the continued development in the market supporting climate-friendly financing and projects. We are grateful to the investors, banks, issuers and other participants who are working together to help expand this market and support an objective that benefits all of us,” said Doris Herrera-Pol, Director and Global Head of Capital Markets at the World Bank.
“The World Bank’s return to the Green Bond market with a new 10yr transaction was tailored for the emergence of new private investors with a specific investment strategy for climate-change focused projects. The combination of the long tenor and new green bond investors highlights the World Bank’s pioneering role in the growth and development of sustainable debt capital markets. We are honoured to contribute to this important transaction,” said Nigel Cree, Head of Sovereign / Supranational / Agency origination at Deutsche Bank.
"The World Bank continues to pioneer the development of the Green Bond market and its status as one of the flagship issuers in this field has attracted several new green investors with this bond issue, their longest dated USD green bond to date. Morgan Stanley is proud to have partnered with the World Bank in several of their landmark green bond transactions and congratulates them on this well-timed deal that comes in response to demand from the green investor community to increase duration in a low-yield environment," said Navindu Katugampola, Head of Green Bond Origination at Morgan Stanley.
"The last 7 years collaboration with investors is giving the World Bank a platform to offer investors a possibility to learn about climate challenges and support climate related solutions at the same time as it allows the World Bank to broaden their investor base among institutional investors. From SEB it’s a privilege to be joining this path and we appreciate the insight the World Bank has brought, not only in respect to understanding global challenges but primarily in how we through our partnership can assist in addressing these challenges,” said Christopher Flensborg, Head of ESG & Climate-Financial Solutions at SEB.
Transaction Summary:
Issuer: World Bank (International Bank for Reconstruction and Development, ‘IBRD’)
Issuer rating: Aaa/AAA
Maturity: 10-year
Amount: USD 600 million
Settlement date: March 3, 2015
Coupon: 2.125%
Coupon payment dates: Paid semi-annually on March 03, and September 03 of each year, with first coupon paid on September 03, 2015
Maturity date: March 3, 2025
Issue price: 99.108%
Issue yield: 2.225%
Listing: Luxembourg Stock Exchange
Clearing systems: DTC, Euroclear, Clearstream
ISIN: US45905URL07
Joint lead managers: Deutsche Bank, Morgan Stanley, 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 and the original member of the World Bank Group. 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 Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. It has been issuing sustainable development bonds in the international capital markets for over 60 years to fund its activities that achieve a positive impact.
Information on bonds for investors is available on the World Bank Treasury website: (www.worldbank.org/debtsecurities).
For more information about World Bank Green Bonds, see: http://treasury.worldbank.org/greenbonds.
