Washington, DC, October 19, 2017 – The International Bank for Reconstruction and Development or IBRD, rated Aaa/AAA (“World Bank”) will, for the first time, issue U.S. dollar-denominated Sustainable Growth Bonds for retail investors in Belgium.
The World Bank Sustainable Growth Bond 12/2024 is a unique structured product that offers retail investors an opportunity to support global development priorities in two ways. Returns are linked to the performance of an index of companies that are supporting the Sustainable Development Goals in their operations. In addition, proceeds of the bonds will support the World Bank’s sustainable development activities around the world.
The subscription period runs from October 16, 2017 to November 30, 2017. The bonds will be distributed in Belgium by BNP Paribas Fortis. All relevant information about the product and distributing banks is available at https://sustainablegrowthbond.com.
The World Bank has an established track record as an issuer rated Aaa/AAA 1. This new offering builds on previous issuances for Belgian retail investors: in 2014, the World Bank issued the first equity-linked Green Bonds in Belgium, followed by a second issuance in 2015.
World Bank Green Bonds support eligible development projects that are helping to address and mitigate the impact of climate change in developing countries. The World Bank has issued more than US$10 billion in Green Bonds since it issued the first labelled Green Bond in 2007.
This year, the World Bank is expanding its offering to Belgian investors from Green Bonds to Sustainable Growth Bonds. This allows investors to contribute towards a broader range of development priorities, focusing on World Bank projects that support all 17 Sustainable Development Goals.
Heike Reichelt, Head of Investor Relations, World Bank, said: “We are always exploring innovative ways to raise funding for the World Bank’s goals of eradicating poverty and boosting shared prosperity. World Bank Sustainable Growth Bond 12/2024 offers Belgian investors an opportunity to align their social and financial objectives, and make a lasting contribution to achieving global development goals.”
The bonds will be redeemed at 100% of the nominal amount in U.S. dollars at 7-year maturity, and feature a potential additional return directly linked to the performance of the World Sustainable Development Goals Select (Price) Index 2.
This equity index, developed by BNP Paribas as index sponsor, is composed of 30 companies. The objective of the index is to capture the performance of companies selected by Vigeo Eiris, a leading provider of environmental, social and governance research and services, for their environmental, social and governance performance. The shares in the selection pool are then filtered by an index calculation agent to identify the shares with the highest dividends, while avoiding excess sectorial and regional concentration, with the lowest volatility possible. The composition of the index is reviewed and adjusted every three months.
For more information, visit https://treasury.worldbank.org or https://sustainablegrowthbond.com/.
1 Highest credit rating assigned by Moody’s/Standard & Poor’s as of 2 October 2017. This credit rating may be reviewed at any time by the rating agencies and is not a guarantee of the solvency of the Issuer.
2 The World Sustainable Development Goals Select (Price) Index was launched on 26 July 2017. The historical data are limited to this date and performances are simulated before. This index is a “Price Return” index, so dividends distributed by this index’s equities are not reinvested into it and therefore have no direct influence on its performance, unlike a “Total Return” index. The future performance of the underlying index cannot be predicted based on its historical performance. Further information in respect of the underlying index (including its daily closing price, its composition and the selection process) can be found on the website https://indx.bnpparibas.com/ENHAGOAL Index/.
Summary of terms (*)
International Bank for Reconstruction and Development, IBRD
Moody’s Aaa / stable outlook (as of 2nd October 2017)
Standard & Poor’s AAA / stable outlook (as of 2nd October 2017)
From USD2,000,000 to USD150,000,000
13 December 2017
13 December 2024
102% of the Specified Denomination, namely USD 102 (including a distribution commission corresponding to an annual equivalent of maximum 0.80% of the Specified Denomination)
16 October 2017 to 30 November 2017 (subject to early closing, at the discretion of the Issuer – please refer to the Prospectus and the Final Terms)
Redemption at maturity (**)
100% of Specified Denomination (in US dollars)
Redemption premium paid at maturity (**)
Investors might be entitled to a premium linked to the positive performance (if any) of the underlying index , payable in USD on the Maturity date.
S0 means the official closing level of the underlying index on Initial Observation Date
Si means the arithmetic mean of the closing levels of the underlying index on each Interim Observation Dates
Si/S0 – 1 is the “Adopted Performance”
- If Si/S0 – 1 ≤ 0 (the Adopted Performance is negative or null): no premium
- If Si/S0 – 1 > 0 (the Adopted Performance is positive): premium = US$100 × [Si/S0 – 1] (Specified Denomination multiplied by Adopted Performance)
World Sustainable Development Goals Select (Price) Index
Initial observation date
1 December 2017
Final observation date
26 November 2024
Interim observation dates
26 May 2023; 26 June 2023; 26 July 2023; 28 August 2023; 26 September 2023; 26 October 2023; 27 November 2023; 27 December 2023; 26 January 2024; 26 February 2024; 26 March 2024; 26 April 2024; 27 May 2024; 26 June 2024; 26 July 2024; 26 August 2024; 26 September 2024; 28 October 2024; 26 November 2024
Luxembourg Stock Exchange (This admission to trading on a regulated market does not guarantee any liquidity)
BNP Paribas Fortis
(*) Please see the Prospectus and Final Terms for a detailed description of the Terms and Conditions of the bonds and the related risks (including the credit risk, the liquidity risk, the risk of underperformance of the underlying index, and the index-related risks) and possible costs and expenses with regard to an investment in the bonds, available at https://sustainablegrowthbond.com as of the start of the offering period in Belgium. Any offer of the bonds will solely take place on the basis of the Prospectus and Final Terms prepared by the World Bank or on behalf of the World Bank. The Prospectus and the Final Terms have not been approved or disapproved by any competent authority in the European Economic Area. The Prospectus is not and does not comprise a “base prospectus” for the purposes of Article 5.4 of EU Directive 2003/71/EC (Prospectus Directive) and has not been submitted to, reviewed or approved by the FSMA. Each distributing bank shall communicate to its clients on request the contact details of its ombudsman or similar department in charge of the handling of claims..
(**) Excluding fees and taxes, subject to foreign exchange risk if the investor converts the capital and the potential redemption premium that are paid to them to their own currency. In case of default of the Issuer, External Event or Force Majeure (as defined in the Final Terms), you are exposed to the risk of not get back the concerned amounts and to the risk of partial or total loss of capital.
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
For more information about World Bank Sustainable Development Bonds, see: https://treasury.worldbank.org.
About BNP Paribas
BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 74 countries, with more than 192,000 employees, including more than 146,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporate and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. 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 in Mediterranean 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 as well as a solid and fast-growing business in Asia-Pacific. For further information visit www.bnpparibas.com.
Vigeo Eiris is a global provider of environmental, social and governance (ESG) research to investors and public and private corporates. The agency evaluates the level of integration of sustainability factors in the strategy and the operations of organizations and undertakes a risk assessment to assist investors and companies in decision-making. Vigeo Eiris offers two types of services through separate business units: Vigeo Eiris rating offers databases, sector-based analyses, ratings, benchmarks and portfolio screening, to serve all ethical and responsible investment strategies. Vigeo Eiris enterprise assesses organizations of all sizes, listed and not listed companies in order to support them in the integration of ESG criteria into their business functions and strategic operations. Vigeo Eiris methodologies and rating services adhere to the strictest quality standards and have been certified to the independent ARISTA® standard. Vigeo Eiris is CBI (Climate Bond Initiative) Verifier.
Vigeo Eiris is represented in Paris, London, Boston, Brussels, Casablanca, Hong Kong, Milan, Montreal, Rabat, Santiago, Stockholm and Tokyo. The team is composed of more than 200 experts of 28 nationalities with diversified and complementary skills. Vigeo Eiris has developed the “Vigeo Eiris Global Network” made of 6 research providers (Australia, Brazil, Germany, Japan, Spain and Mexico). For more information: www.vigeo-eiris.com