Washington, D.C., January 8, 2019—The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced its first benchmark bond of the calendar year, a CAD 1.5 billion Sustainable Development bond. This is the largest bond issued by an SSA (sovereign, supranational agency) in the Canadian market.
The Sustainable Development bond raises awareness for the long-lasting benefits of investing in the health and nutrition of women, children, and adolescents. These priorities are addressed under the Sustainable Development Goals, specifically SDG 3—ensure healthy lives and promote wellbeing for all at all ages—and SDG 5—achieve gender equality and empower all women and girls.
Market reception for the bond was extremely strong. The bond was nearly 2.5 times oversubscribed. It was upsized from an initial target of CAD 1 billion, recognizing the high quality, diversified order book. The bond was placed with 43 investors globally, including Addenda Capital Inc, Manulife Asset Management, and Sun Life. BMO Capital Markets and TD Securities were joint lead managers for this transaction.
Jingdong Hua, World Bank Vice President and Treasurer, said: “This is a fantastic transaction to kick off our 2019 benchmark program. The warm welcome from investors signals the deepening demand for high quality assets that combine financial and development returns. It is also a vote of confidence in our strategy to engage with investors and highlight the powerful role of capital markets in achieving the Sustainable Development Goals.”
This Sustainable Development Bond is part of a World Bank initiative to engage investors on the importance of investing in the health and nutrition of women, children and adolescents. Since the initiative was launched in June 2018, the World Bank has raised over US$2 billion from institutional and retail investors focused on highlighting these issues.
Investor Distribution by Investor Type | Investor Distribution by Region | ||
Central Banks/Official Institutions | 42% | Asia | 39% |
Banks/Banks Treasuries/Corporates | 38% | Canada | 35% |
Asset Managers/Insurance/Pension Funds | 20% | Europe | 19% |
Other (Americas) | 7% | ||
Roger Beauchemin, President and Chief Executive Officer of Addenda Capital, said: “Addenda Capital is pleased to again have the opportunity to enable our clients to earn compelling risk-adjusted investment returns and support the World Bank and the important work they are doing around the world to invest in the health and nutrition of women, children and adolescents.”
Randall Malcom, Senior Managing Director at Sun Life, said: “Sun Life appreciates IBRD's continued commitment to providing additional Canadian dollar fixed income investment opportunities supporting health and diversity - objectives that align well with Sun Life’s sustainability strategy. Increased issuance will hopefully spur greater investor awareness and interest in the market for ESG-related assets in Canada.”
Kelsey Gunderson, Head of Global Trading Products at BMO Capital Markets, said: “A remarkable order book of nearly CAD2.4 billion allowed World Bank to price the largest ever supranational Canadian Dollar bond issue. After a tumultuous December, investors were pleased to see a strongly rated issuer re-open Canadian fixed income markets with a liquid bond whose proceeds will create a positive impact. With this bond, their third bond in support of health, nutrition of women, children and adolescents, World Bank continues to lead the growth of the market in Canada for sustainable development related securities.”
Salvatore Aloisi, Managing Director, International Fixed Income, TD Securities, said: “A sweet victory for the Maple Market, today’s $1.5bn 3yr Sustainable Development Bond marks an emphatic return for the World Bank in Canadian Dollar following a half year absence. Providing the rare mix of impact investing opportunity, safety and liquidity, the World Bank team must be commended in their committed approach to a diversified funding program.”
Learn more about World Bank Sustainable Development Bonds here: https://youtu.be/IS7l7KSZJK0
Summary of terms (*)
Issuer: | International Bank for Reconstruction and Development, IBRD |
Issuer rating: | Aaa /AAA (Moody's / S&P) |
Maturity | 3-year |
Format | Global (SEC exempt) Sustainable Development Bond |
Issuance amount: | CAD$1.5 billion |
Settlement date: | January 18, 2019 |
Maturity: | January 18, 2022 |
Benchmark: | CAN 0.500% due March 1, 2022 |
Coupon: | 2.20% |
Issue price: | 99.974% |
Specified Denomination: | C$1,000 x C$1,000 |
Listing: | Luxembourg Stock Exchange’s Regulated Market |
CUSIP / ISIN: | CA459058GN73 / 459058GN7 |
Clearing system: | CDS, Clearstream, Euroclear |
Lead managers: | BMO Capital Markets, TD Securities |
* This press release is not an offer for sale of bonds of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank". Any offering of the bonds will be made only by means of a prospectus containing detailed information that will made available through the lead managers and is subject to restrictions under the laws of several countries. Securities may not be offered or sold except in compliance with all such laws.
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 here www.worldbank.org/debtsecurities.
Bond Proceeds
The World Bank (IBRD) issues USD 50 to 55 billion in bonds for sustainable development projects and programs every year. Without being committed or earmarked for lending to, or financing of, any particular projects or programs, the net proceeds of the bonds are used to support the financing of sustainable development projects and programs in countries that are middle-income or creditworthy lower-income IBRD members and are working in partnership with IBRD to eliminate extreme poverty and boost shared prosperity. Projects and programs supported by IBRD 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.
