On April 19, 2018, the International Development Association (IDA) made its debut in the capital markets, joining a select group of top-tier supranational issuers with its first bond—a US$1.5 billion benchmark on the back of an orderbook totaling US$4.6 billion from investors around the world.
The 5-year bond marked the launch of IDA’s borrowing program.
Investors welcomed the bond with great enthusiasm. The quality of the orderbook—with orders originating from 110 investors in 30 countries--reflected IDA’s strong financial profile and the unique opportunity to directly contribute to IDA’s work towards the Sustainable Development Goals.
“IDA’s inaugural issue is a rare opportunity for private investors to direct funds towards some of the poorest, and most fragile countries in the world. Under IDA 18, financing instruments are expanded to promote resilience, crisis preparedness, and assistance for refugees and their host communities. AIM is very pleased to support these critical initiatives through our investment,” said Stuart Kinnersley, Managing Partner at Affirmative IM.
“We are delighted with the success of the inaugural bond of IDA, and welcome this very strong impact issuer in our investment universe. We truly appreciate its mandate and financial profile,” said Hassatou Diop N’Sele, Treasurer of the African Development Bank Group.
“Congratulations on the successful launch of IDA’s inaugural bond issue! Alecta is proud and honored to support IDA’s mission to reduce poverty by contributing to programs aimed at boosting economic growth, reducing inequality and improving the quality of life of people in the world’s poorest countries. The bond also meets our stringent requirements for financial returns. It is an excellent example of how we can contribute effectively to the Sustainable Development Goals,” said Peter Lööw, Head of Responsible Investment, Alecta Pension Insurance Mutual.
“The IDA bond is exactly the kind of issuance long-term, responsible investors like APG want in the market. On behalf of our pension clients, like civil servants’ scheme ABP, we are looking to put a larger amount of capital to work toward sustainable social development. That makes this impactful, high-quality bond a strong fit for our global Developed Markets Debt portfolio. We are proud subscribers to IDA’s historic offering,” said Herman Slooijer, Managing Director Developed Markets Debt, APG Asset Management.
“The mission of IDA, to support the most vulnerable populations in the world, is a goal that we share. The Praxis Impact Bond Fund, over the past 17 years, has worked hard to deliberately invest in projects and loans that reduce poverty in the global community. This new IDA bond is one more step in opening doors of economic opportunity to nations who need it most and we are happy to participate in their inaugural offering,” said Benjamin Bailey, Vice President of Investments, Praxis Mutual Funds.
“We are very proud to be part of IDA’s first issue and look forward to be part of issues to come. With IDA entering the bond market we now have an opportunity to source money, safeguarded by the high standards of the World Bank, to the countries where it is most needed,” said Jens Henriksson, President and CEO of Folksam Group.
“Continuously innovating in how we finance development and mobilize capital for the world’s poorest people is one of IFAD’s highest priorities and central to our mandate in eradicating rural poverty and hunger. IFAD welcomed the opportunity to be an early investor in IDA’s successful debut bond issue because of our mutual commitment to transform development finance in order to successfully reach the Global Goals by 2030,” said Alvaro Lario, Associate Vice-President and Chief Financial Officer at the International Fund for Agricultural Development (IFAD).
"We, KIC, participated actively in the inaugural issuance of IDA's note. IDA's mandate fits well with KIC's emphasis on ESG investing, and the issue's attractive pricing was the icing on the cake," said Tae H. Park, Senior Managing Director, Global FICC at Korean Investment Corporation (KIC).
"The investment fits well into our interest rate portfolio, and furthermore supports value creation from a broader perspective, which we consider to be very positive. IDA is also a credible player with extensive experience working in countries with major challenges. We see this as a way to promote and contribute to sustainable development," said Lars-Göran Orrevall, Asset Management Manager at Skandia.
*This press release does not constitute an offer for sale of the securities described. The offering and sale of the securities described in this document are subject to restrictions under the laws of several jurisdictions. Securities may not be offered or sold except in compliance with all such laws.
The International Development Association (IDA), rated Aaa/AAA (Moody’s/S&P), is one of the largest sources of funding for the world’s poorest countries. Established in 1960 and overseen by 173 shareholder nations, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years. Proceeds of IDA bonds support sustainable development projects and programs in IDA’s eligible member countries. Projects and programs supported by IDA are designed to achieve a positive social impact and undergo a rigorous review and internal approval process aimed at safeguarding equitable and sustainable economic growth. Information on IDA bonds is available at https://www.worldbank.org/en/about/unit/treasury/debt-products/ida