Washington, DC, May 18, 2015 – The subscription period for the World Bank (IBRD, rated Aaa/AAA) unsecured and unsubordinated debt securities based on the performance of the Ethical Europe Equity Index (the “Notes”) closed last week. This is the first equity-linked green bond launched by the World Bank for retail investors in the United States. The subscription period lasted a total of 4 weeks, from April 20, 2015 to May 14, 2015.
This product allows investors to benefit from the growth potential of an equity index while at the same time, supporting projects financed by the World Bank that have a positive impact on climate change. This initiative follows the recent successes of similar Green Growth Bond offerings in Europe and Asia.
BNP Paribas Securities Corp. worked with the World Bank to develop the Notes, and has also underwritten the issue.
Since its first green bond launched in 2008, the World Bank has raised more than USD 8.2 billion through over 95 green bonds in 18 different currencies. All World Bank green bonds offer investors an opportunity to support environmental solutions through a bond product that benefits from the triple-A credit strength of the World Bank. World Bank green bonds support the financing of projects in member countries that meet specific criteria for low carbon and climate resilient growth, seeking to mitigate climate change or help affected people adapt to it. The types of eligible projects include renewable energy installations, energy efficiency projects, and new technologies in waste management and agriculture that reduce greenhouse gas emissions and help finance the transition to a low carbon economy. They also include financing for forest and watershed management and infrastructure to prevent climate-related flood damage and build climate resilience.
Ethical Equity Index: The Notes are linked to the long-term performance of the Ethical Europe Equity Index. The index consists of 30 European stocks, selected for inclusion based on an analysis by Vigeo, an independent and Environmental, Social and Governance (ESG) rating agency, and Forum Ethibel, an independent Belgian consulting agency that rates and audits sustainability, ethics, and social responsibility metrics of corporations. The index is owned, calculated and managed by Solactive, a global index provider
Transaction Summary | |
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer Rating: | Aaa (Moody’s)/AAA (S&P)1 |
Amount | USD 29,687,000 |
Issuance Type: | Unsecured and unsubordinated obligations of the Issuer |
Dealer: | BNP Paribas Securities Corp. The Dealer may make sales through its affiliates or selling agents. |
Subscription Period: | From April 20th 2015 to May 14th 2015 |
Trade Date: | May 15th, 2015 |
Issue Date: | May 22nd, 2015 (five Business Days after the Trade Date) |
Maturity Date: | May 22nd, 2025 |
Issue Price: | Each Note will have an Issue Price and an initial offering price of US$1,000. |
Coupon: | None |
Index: | The return on the Notes is linked to the Average Index Return of the Ethical Europe Equity Index BBG: <SOLEEE> |
Final Redemption: | The amount paid at maturity, for each US$1,000 nominal amount of Notes, will equal US$1,000 plus the Premium Paid at Maturity. |
Premium Paid at Maturity: | The product of US$1,000 multiplied by the greater of (i) the Average Index Return and (ii) zero (0). A negative Average Index Return will imply that the Premium Paid at Maturity will be zero. A positive Average Index Return is not assured and historic data is not necessarily a guide to future performance. |
Average Index Return: | The quotient, expressed as a percentage, as calculated by the Calculation Agent, equal to (i) the Average Index Level minus the Initial Index Level divided by (ii) the Initial Index Level. |
Average Index Level: | The arithmetic mean (rounded to the nearest four (4) decimal places, 0.00005 rounded upwards) of the Index Closing Levels on each Averaging Observation Date, as calculated by the Calculation Agent. |
Initial Index Level: | The Index Closing Level on the Initial Observation Date |
Initial Observation Date: | May 15th, 2015 |
Final Observation Date: | May 15th, 2025 |
Averaging Observation Dates: | 24 monthly observation dates beginning June 15th, 2023 and ending on the Final Observation Date. |
Participation Rate: | 102% |
Fees: | 3.675% |
1. S&P / Moody’s rating as of 04/30/2015. A credit rating (i) is subject to downward revision, suspension or withdrawal at any time by the assigning rating organization, (ii) does not take into account market risk or the performance-related risks of the investment, and (iii) is not a recommendation to buy, sell or hold securities. A credit rating relates to the ability of the issuer to pay its obligations generally. The Notes have not been and will not be rated.
(*) Prior to purchasing any Notes, you must read the disclosure materials that will set out the specific terms for such Notes, which describe certain risks of purchasing the Notes available at www.GreenGrowthBond.com.
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 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 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: https://treasury.worldbank.org/greenbonds.
About BNP Paribas
BNP Paribas has a presence in 75 countries with more than 185,000 employees, including 145,000 in Europe. It ranks highly in its two core activities: Retail Banking & Services (comprised of Domestic Markets and International Financial Services) and Corporate & Institutional Banking. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the leader in consumer lending. BNP Paribas is rolling out its integrated retail banking model across Mediterranean basin countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas and solid and fast-growing businesses in Asia-Pacific.
About Solactive
Solactive AG is one of the key players in the indexing space. Focusing on tailor-made indices, the German multi asset class provider is developing, calculating and distributing them worldwide. As of 30th June 2014, Solactive AG calculates indices for over 160 clients in Europe, America and Asia. Approximately 25 billion USD are invested in products linked to indices calculated by the Company globally, primarily via 145 ETFs.
Solactive is a registered trade mark of Solactive AG. Solactive does not manage, sponsor, endorse, promote or sell any investment products based on the Ethical Europe Equity Index.
About Vigeo
Founded in 2002 and led by Nicole Notat, Vigeo is the leading European agency in evaluating corporate social responsibility through six domains: environment, human rights, human resources, community involvement, business behavior, and corporate governance. Vigeo offers two types of services through two business brands:
- Vigeo rating – the way to responsible investment – offers a broad range of products and services to investors and asset managers who seek a sustainable and responsible performance of their investments on more than 3,000 issuers: companies, regions and states;
- Vigeo enterprise – the way to responsible management – works directly with organizations of all sizes from both public and private sectors, conducts global CSR audits and benchmarks, supports teams and integrates CSR/SRI criteria into business functions and strategic operations.
Vigeo Rating's research meets high quality standards and has been externally certified to the Arista standard since 2009, a quality standard for SRI research. Vigeo is present in Paris, Casablanca, Brussels, Milan, London, Tokyo and Santiago of Chile and has more than 120 employees.
About Forum Ethibel
Forum ETHIBEL is an independent association whose goal is to raise the awareness of both the general public and institutions, so that they make investments in line with the ethical values it promotes. As an independent advisor and auditor on SRI in Europe, Forum ETHIBEL provides specific instruments and labels to support investors in their search for SRI products. Based on Vigeo data and ratings, Forum ETHIBEL draws up the Ethibel Investment Register as the basis of the label Ethibel EXCELLENCE and the indices ESI Excellence Europe and Global.
