Washington, DC, September 13, 2017 – The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) today priced its first dual currency transaction composed of a AUD Kangaroo Bond and a NZD Kauri Bond. The new 5-year AUD 850 million Kangaroo bond is the largest transaction for the SSA sector (supranationals, sovereigns and agencies) of the year. The Kauri NZD 350 million Kauri bond offers investors additional liquidity through an increase of the existing NZD550 million bond, taking the total outstanding principal amount to NZD900 million.
The 5-year AUD850 million bond offers a coupon of 2.60% with a September 20, 2022 maturity and has an issue price of 99.582% to yield 2.69% (semi-annual). This equates to a spread of 44.5 basis points over the 5.75% Australian Commonwealth Government Benchmark (ACGB) due July 2022.
The 5-year NZD350 million tap to the existing NZD550 million bond offers a coupon of 3.375% and matures on January 25, 2022. The Kauri was issued at 102.149364% (plus accrued interest of 0.5227%) to yield 2.875% (semi-annual) which equates to a spread of 0.705% basis points over the 6.00% Government Benchmark (NZGB) due May 2021.
Both transactions settle on September 20, 2017.
The joint lead managers for this dual bond offering are ANZ, Deutsche Bank and TD Securities.
“We were pleased to offer investors added choices with these new dual currency benchmark offerings and were happy with the amazing investor reception the transaction received. Both Australia and New Zealand markets are very important for World Bank funding, so we would like to express our appreciation to investors and our bank partners for their continued support to the World Bank sustainable development mandate.” said Andrea Dore, Head of Capital Markets, World Bank.
Joint lead manager quotes
“The World Bank is forging new territory again, this time with the dual AUD and NZD currency transaction. World Bank’s strategic approach to these markets, delivering supply in what’s been a challenging tenor for issuers, was clearly appreciated by their diverse investor base with an impressive result. ANZ was thrilled to have played a role in this innovative approach to meeting investor’s needs” said Glen Sorensen, Director Debt Syndicate, ANZ.
“An impressive return to the Kangaroo market for this marquee Kangaroo issuer. Not having issued a public deal in the Australian market for 6 months, the AUD investor base had clearly built up a healthy appetite for a new World Bank Kangaroo deal, allowing World Bank to print the largest SSA deal of the year. It was also particularly pleasing to see a good mix of domestic and offshore investors coming into the deal.” said Harald Eikeland, Director Debt Syndicate, ANZ.
“Deutsche Bank is incredibly proud to be part of such a high profile and successful transaction that raised nearly USD1 billion across two different currencies and highlights the continuing support the World Bank attracts not just in Australia and New Zealand, but worldwide. Issuing simultaneously in two different currencies - both in benchmarks – was a first not only for the World Bank but for these markets and offered the unique opportunity of reaching even more investors in one bookbuild.” said Craig Johnston Vice President, Deutsche Bank.
“AUD investors laid out a clear message of ‘show us a compelling offering and we will support you’ - and this was certainly the case here, with the largest SSA single tranche offering in over 3 years. The innovative approach of launching both currencies simultaneously was valued by investors and opens the door for similar transactions going forward. TD Securities was very thankful to be involved in this market development” said Tom Irving, Managing Director, TD Securities.
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 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 70 years to fund its activities that achieve a positive impact. Information on World Bank bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.