Washington, DC, April 22, 2015 – The World Bank (IBRD, Aaa/AAA) today priced a record breaking 3-year USD global benchmark transaction, raising USD 5 billion in a single tranche.
It is the second largest 3-year bond ever priced by the World Bank and is now the Bank’s largest outstanding global bond. The transaction was significantly oversubscribed with over 100 orders, a final order book in excess of USD 6.8 billion and strong central bank and US investor participation, many of the latter new investors to the World Bank. The deal completes the World Bank’s curve with a new liquid point in the 3-year part of the curve and represents the World Bank’s fifth and most likely final USD benchmark offering of its 2014-2015 fiscal year – following the highly successful long 2-, 5-, 10- and 7-year transactions in July, September, November, and February, respectively. The joint-lead managers for this global bond are Barclays, BMO Capital Markets, Deutsche Bank and Nomura.
This 3-year USD benchmark carries a semi-annual coupon of 1.000% and matures on June 15, 2018. It offers investors a yield of 1.056%, which is equivalent to a spread of 16.7 basis points over the 0.750% U.S. Treasury note due April 15, 2018.
“This is a high note for what is most likely our last USD benchmark of our fiscal year ending in June. This is our first 3-year USD benchmark transaction since February 2013. We saw an opportunity to refresh our curve at this maturity at a rate that was effective for us, while offering investors an attractive alternative to agencies. We are delighted by the very strong investor response from our existing investor base as well as attracting new investors to this deal”, said Doris Herrera-Pol, Director and Global Head of Capital Markets at the World Bank.
Investor Distribution of the USD 5 billion 3-year USD Benchmark:
|By Geography||By Investor Type|
Central Banks / Official Institutions
Asset Managers / Pension / Insurance
Banks / Bank Treasuries / Corporates
Middle East and Africa
World Bank (International Bank for Reconstruction and Development, IBRD)
USD 5 billion
April 30, 2015
Coupon payment dates:
Paid semi-annually on June 15, and December 15 of each year, with a short first coupon on June 15, 2015
June 15, 2018
Luxembourg Stock Exchange
Fedwire, Euroclear, Clearstream
Joint lead managers:
Barclays, BMO Capital Markets, Deutsche Bank, Nomura
Senior Co-lead managers:
Castle Oak Securities, Crédit Agricole CIB, FTN Financial and Jefferies
BNP Paribas, BoAML, Citi, CS, Daiwa, DZ Bank, GS, HSBC, MS, RBC, SEB, Soc Gen, TD, Wells Fargo
The present transaction is consistent with the World Bank’s longstanding practice of deploying its franchise as an issuer in the international capital markets to offer investor’s 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.
Joint Lead Manager Quotes:
“Once again, the World Bank has proven its ability to successfully identify an optimal issuance window and deliver to both new and existing investors what they want by re-opening the 3-year bucket whilst achieving a cost efficient alternative as an issuer by pricing at the tightest level vs. mid-swaps this year thus far for a supranational. The success of this deal is testament to the World Bank’s track record and is a fitting high note on which the issuer completes its USD Global benchmark programme for the 2014/2015 fiscal year”, said Susan Barron, Managing Director SSAR Origination at Barclays.
“Without a single USD benchmark 3 year transaction in the SSA space in over a month, demand was evident as the World Bank re-ignited a traditional sweet spot on the curve in true World Bank fashion, with over 100 investors leading to an orderbook over USD 6.8 billion. The final size of USD 5 billion marks the World Bank’s largest 3 year outcome in over 6 years, and for an institution that has been active in the capital markets for over 65 years, it was impressive to still see first time buyers involved. The final pricing spread of mid-swaps minus 10 bps marks the first 3 year supranational transaction to achieve double digits through the mid-swaps curve this year, another testament to the IBRD credit. We were pleased to be involved in this landmark transaction”, said Scott Graham, Head of International Public Markets at BMO Capital Markets.
“By tapping into the strong demand at the front end of the SSA curve with a rare 3-year Global, priced at the tightest spread to mid-swaps for a supranational so far this year, the World Bank has once again picked the optimal maturity in response to a more uncertain environment and lack of supranational supply in this maturity sector. The fact that so many different and new investors have flocked to the World Bank is a testament of the issuer’s appeal as a liquid quality asset. We congratulate the World Bank on this fantastic result”, said Nigel Cree, Head of SSA Origination at Deutsche Bank.
“World Bank’s final deal of their fiscal year was another banner trade. To print USD 5 billion at mid-swaps minus 10 bps is no mean feat in these markets, but the quality and depth of this order book is second to none. In particular World Bank has been rewarded for its determination in engaging US state funds and public institutions, with significant interest from this sector on the back of changes in investment guidelines supporting the traditionally strong official money element we have come to expect in World Bank trades”, said Spencer Dove, Managing Director SSA DCM at Nomura.
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 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. The World Bank has been issuing bonds in the international capital markets for over 60 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: (www.worldbank.org/debtsecurities).