Washington DC, May 27, 2016 -The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) has priced a AUD 800 million increase to its existing 2.8% January 2021 Kangaroo fixed-rate global bond. The trade was launched with an initial minimum target size of AUD 200m but was upsized to respond to extremely strong investor demand, taking the total amount outstanding amount to AUD 1.9 billion. The deal priced at 101.913% (plus 139 days accrued interest of 1.069%) to yield 2.36% (semi-annual). This is the largest Australian dollar SSA bond issuance since the World Bank’s last Kangaroo bond priced in June 2014, highlighting the World Bank’s leading presence in the Kangaroo market.
The bonds were distributed to a broad range of institutional investors in Australia 26%, Asia 47%, Europe 19%, and Japan 8%, with over 20 orders from central banks and other official institutions, commercial banks, and asset managers.
The joint-lead managers for the transaction were Deutsche Bank, Nomura, RBC Capital Markets.
“We are extremely grateful for the strong reception for this transaction and are especially pleased with the participation of several new investors. It is the World Bank Treasury’s objective to continue to provide investors in strategic markets like the Australian Dollar market with safe investments that also contribute to positive social and environmental results in our borrowing member countries,” said Arunma Oteh, Vice President and Treasurer, World Bank.
World Bank (International Bank for Reconstruction and Development, IBRD)
AUD 800 million, Total Outstanding AUD 1.9 billion
May 11, 2016
AUD 1,000 The minimum consideration payable when issued in Australia will be AUD 500,000
January 13, 2021
101.913% plus 139 days’ accrued interest of 1.069%
Luxembourg Stock Exchange
Austraclear, Euroclear, Clearstream
Joint lead managers:
Deutsche Bank, Nomura, RBC Capital Markets
Joint lead manager quotes:
“A fantastic result for the World Bank raising A$800m with the largest Kangaroo SSA deal of the year. The depth of demand for World Bank was very much evident in this transaction with a variety of different investor geographies and types participating in the deal. The deal emphasizes the tension that World Bank has been able to keep in their curve by issuing less frequently and into demand. The World Bank was able to take advantage of very positive market conditions, created by the upcoming ACGB redemption and largest ever domestic index extension. Full credit to the World Bank for being able to take advantage of these conditions and issuing such a successful deal,” said Craig Johnston, Vice President, Debt Syndicate, Deutsche Bank.
“The World Bank were the first SSA borrower to test the kangaroo market in benchmark format post the RBA cut the cash rate by 25bps. It became apparent from the momentum in the book build process that the newly found range in yields and FX contributed to the exceptional demand from offshore accounts as they sought to pick up additional yield the transaction offered vs government bonds. Once again the World Bank have surprised the market to the upside, with the largest kangaroo transaction in almost 2 years from a diverse set of investors. Nomura is extremely pleased to have had the opportunity once again to be part of a successful transaction from the World Bank,” said Oliver Holt, Vice President, Global Markets Syndicate, Nomura.
“Following a period of time where transaction volumes have been more subdued, the World Bank returned to the benchmark AUD market with a well-timed and upsized A$ 800mm transaction that is the largest AUD SSA transaction for almost two years. The result underscores how well their name continues to resonate with the domestic and offshore AUD investor base. Once again the World Bank were able to successfully combine volume and price targets to meet their funding objectives with the end result underlining why the AUD market remains a strategic market for funding diversification for them. RBC Capital Markets is pleased to be involved in this important transaction in the Australian market,” said Daniel Chandler, 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 and the original member of the World Bank Group. It operates as a global development cooperative owned by 189 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 sustainable development bonds in the international capital markets for over 60 years to fund its activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.