Washington, D.C., November 17, 2020 – The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) today priced a 3-year USD 3 billion and a 7-year USD 5 billion Sustainable Development Bond. With its dual-tranche bond, the World Bank received over 300 orders totaling more than USD 15 billion, the most interest it has ever attracted for a benchmark bond.
The 3-year USD 3 billion bond offers a coupon of 0.250% p.a. paid semi-annually maturing on November 24, 2023 and an issue price of 99.785% to yield 0.322% (semi-annual). This equates to a spread of 10.1 basis points over the 0.250% US Treasury benchmark due November 2023.
The 7-year USD 5 billion bond offers a coupon of 0.750% p.a. paid semi-annually maturing on November 24, 2027 and an issue price of 99.864% to yield 0.770% (semi-annual). This equates to a spread of 14.83 basis points over the 0.500% US Treasury benchmark due October 2027.
The joint lead managers for the transactions are Citi, J.P. Morgan, Nomura and TD Securities.
“We would like to thank our investors once again for supporting our development mission around the world with such a warm reception to today’s dual-tranche bond offering. Across both tranches, we saw the largest number of investor orders and largest total orderbook for a World Bank market outing,” said Jingdong Hua, Vice President and Treasurer, World Bank. “Together with all of our Sustainable Development Bonds, these transactions will help the World Bank support our member countries in their efforts to safeguard development gains as they respond to the impacts of COVID-19.”
Investor Distribution: USD 3.0 Billion 3-Year
By Geography | By Investor Type | ||
Asia | 38% | Asset Managers/Insurance/Pension Funds | 21% |
EMEA | 28% | Banks/Bank Treasuries/Corporates | 21% |
Americas | 34% | Central Banks/Official Institutions | 58% |
Investor Distribution: USD 5.0 Billion 7-Year
By Geography | By Investor Type | ||
Asia | 44% | Asset Managers/Insurance/Pension Funds | 16% |
EMEA | 32% | Banks/Bank Treasuries/Corporates | 37% |
Americas | 24% | Central Banks/Official Institutions | 47% |
Joint Lead Manager Quotes
“The World Bank has once again demonstrated its unparalleled global access to the highest quality investors, pricing USD 8 billion for the second time this calendar year, this time with a flawless dual-tranche strategy. Demand was equally split between the tranches; with the 7-year beating, the World Bank’s own record as the largest new Sovereign, Supranational and Agency (SSA) issue in the tenor, while the shorter 3-year tranche is the tightest versus mid-swaps in close to two years. Citi is delighted to have been involved in yet another spectacular transaction from the World Bank,” said Philip Brown, Managing Director, Head of SSA DCM, Citi.
“A truly exceptional USD outing from the World Bank, raising USD 8 billion of Sustainable Development Bond funding across two tranches in the 3- and 7-year maturity, with a combined orderbook of over USD 15 billion in the middle of November. The issuer has also redefined the 7-year maturity, having printed USD 5 billion benchmark size here – the largest 7-year deal size since World Bank’s own SSA record in 2015. Congratulations to the World Bank Treasury team, we are delighted to have been involved!” said Keith Price, Head of Frequent Borrower Group, J.P. Morgan.
“Another truly remarkable achievement for the World Bank, the capped 3-year tranche was incredibly well received, yet the star of the show was the less typical 7-year maturity which sets a record for size in the long-end. With today’s dual-tranche, the teams have simultaneously completed the USD benchmark grand slam of 3, 5, 7 and 10 years for 2020 and broken the record for the largest ever SSA 7-year USD global transaction. The demand dynamic that the popularity of the World Bank name is able to generate is truly remarkable and today’s dual-tranche book is one of the strongest I have ever seen,” said Spencer Dove, Managing Director, Head of SSA DCM, Nomura.
“We congratulate the World Bank on an exceptional dual-tranche Sustainable Development Bond in the USD market. The combination of the 3-year and 7-year maturities responded precisely to the investment needs of the full spectrum of World Bank investors; from official institutions to bank treasuries as well as real money accounts. The robust market backdrop and high levels of liquidity across the financial system spurred total demand in excess of USD 15 billion. It is an honor to be involved in the largest ever 7-year SSA offering in the USD market, which reflects the global recognition of the World Bank name,” said Laura O'Connor, Director, Fixed Income Origination & Syndication, TD Securities.
Transaction Summary
| 3-year | 7-year | |
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) | ||
Issuer rating: | Aaa/AAA | ||
Amount: | USD 3,000,000,000 | USD 5,000,000,000 | |
Settlement date: | November 24, 2020 | November 24, 2020 | |
Maturity date: | November 24, 2023 | November 24, 2027 | |
Issue price: | 99.785% | 99.864% | |
Issue yield: | 0.322% semi-annual | 0.770% semi-annual | |
Coupon: | 0.250% p.a., payable semi-annually in arrear | 0.750% p.a., payable semi-annually in arrear | |
Denomination: | USD 1,000 | USD 1,000 | |
Listing: | Luxembourg Stock Exchange | ||
Clearing systems: | Fedwire, Euroclear, Clearstream | ||
ISIN: | US459058JM61 | US459058JN45 | |
Lead managers: | Citi, J.P. Morgan, Nomura and TD Securities | ||
Senior co-lead managers: | BMO Capital, CastleOak, Daiwa, Wells Fargo | ||
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. 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 Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) 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. The World Bank has been issuing bonds in the international capital markets for over 70 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.
World Bank bonds support the financing of programs that further the Sustainable Development Goals. World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association. The World Bank is also a member of the Executive Committee of the Green Bond and Social Bond Principles. A key priority for the World Bank’s capital markets’ engagement is building strategic partnerships with investors to promote the importance of private sector financing in sustainable development.
Disclaimers
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank". Any offering of World Bank securities will take place solely on the basis of the relevant offering documentation including, but not limited to, the prospectus, term sheet and/or final terms, as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject to restrictions under the laws of several countries. World Bank securities may not be offered or sold except in compliance with all such laws.
The net proceeds from the sale of World Bank securities are used to finance sustainable development projects and programs in World Bank’s member countries without being committed or earmarked for lending to, or financing of, any particular projects or programs. Returns on World Bank securities are not linked to the performance of any particular project or program.
Contact
Heike Reichelt
Head of Investor Relations and Sustainable Finance
World Bank Treasury
debtsecurities@worldbank.org
