Washington, DC, February 6, 2018—The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) today priced a new 10.5-year AUD 500 million Kangaroo bond, representing one of the largest long-dated SSA sector (supranationals, sovereigns and agencies) deals since 2012.
The 10.5-year AUD 500 million bond offers a coupon of 3.30% p.a. with an August 14, 2028 maturity and has an issue price of 99.846% to yield 3.3175% (semi-annual). This equates to a spread of 48.75 basis points over the 2.25% Australian Commonwealth Government Benchmark (ACGB) due May 2028.
The transaction settles on February 14, 2018.
The joint lead managers for this bond offering are Deutsche Bank and Nomura.
“We are very pleased with the size and quality of the order book despite the challenging market backdrop. We were able to offer investors an investment opportunity in a new maturity and extend our AUD yield curve. We would like to thank our bank partners that participated in the deal, as well as the many investors for their continued support of the World Bank’s development mandate,” said Andrea Dore, Head of Capital Markets, World Bank.
Investor Distribution
By Geography | By Investor Type | ||
Asia | 88% | Central Banks/Official Institutions | 64% |
Australia | 8% | Asset Managers/Insurance | 20% |
Europe | 4% | Banks/Corporate | 16% |
Summary Terms and Conditions
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer rating: | Aaa/AAA |
Amount: | AUD 500 million |
Settlement date: | February 14, 2018 |
Maturity date: | August 14, 2028 |
Coupon: | 3.30% p.a. payable semi-annually in arrear |
Coupon payments: | 14th February and 14th August in each year |
Re-offer price: | 99.846% |
Re-offer yield: | 3.3175% semi-annual |
Denomination: | AUD 1,000. The minimum consideration payable when issued in Australia: AUD 500,000 |
Clearing systems: | Austraclear / Euroclear / Clearstream |
ISIN: | AU3CB0250652 |
Joint lead managers: | Deutsche Bank and Nomura |
Joint lead manager quotes
Rod Everitt, Head of Australian Dollar Syndicate, Deutsche Bank Sydney said, “World Bank again successfully extend their Australian curve with a large AUD 500 million new August 2028. The measured approach to the market has delivered a large volume new line into the long end of the curve as well as attracting high quality order book.”
Oliver Holt – Executive Director, Global Markets Syndicate, Nomura said, “Once again the World Bank has proven its leading position in the Kangaroo market, garnering the joint largest order book for long dated AUD SSA transaction since 2012. Throughout the book-build process global markets experienced exceptionally high levels of volatility with global equity bourses down as much as 8%, and Commonwealth Government yields of the same maturity rising 13bps before then falling 17bps. The AUD500million outcome was testament to flexibility and patience of investors, as well as the high regard for the World Bank credit as a safe haven asset. We are grateful for the World Bank in entrusting Nomura to manage this transaction through challenging markets.”
*On April 21, 2021, the existing 3.3% May 2028 line was increased by A$ 400 million to a total of A$ 900 million. The increase has an issuance price of 112.568% (plus 0.665% in accrued interest) to yield 1.477% (semi-annual) which equates to a spread -over the May 2028 ACGB of 30.7 basis points. The tap was distributed to asset managers, insurance and pension funds (49%); banks, bank treasuries and corporates (43%); and central banks and official institutions (8%). Investors were globally diverse from Asia (48%); Australia (46%); and Europe (6%).
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 over 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.
