World Bank USD 2.5 Billion 5-Year Bond Mobilizes Finance for Sustainable Development

WASHINGTON, D.C., May 18, 2021 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 2.5 billion 5-year Sustainable Development Bond maturing in July 2026. The deal attracted a wide variety of investors with more than 75 orders and an order book reaching over $3.1 billion with strong demand from central banks and official institutions. Investors included those integrating Environmental, Social and Governance (ESG) criteria in their investment process, as well as those seeking to achieve positive impact through the selection of issuers, like the World Bank, that incorporate climate action and sustainability throughout their operations.

BofA Securities, Citi, J.P. Morgan, and Nomura are the lead managers for the transaction. The bond will be listed on the Luxembourg Stock Exchange.

Against a market tightening backdrop, the bond priced at a spread vs. the reference US Treasury of +13.55 basis points, resulting in an equivalent annual yield of 0.963%.   

“We are grateful to the investors in today’s issue, and all who support the World Bank’s mission through the purchase of its bonds,” said Jingdong Hua, Vice President and Treasurer, World Bank. “Their investment leverages World Bank shareholders’ capital to mobilize financing in support of sustainable development to achieve positive environmental and social impact, including critical COVID-19 response projects and programs.”

Investor Distribution

Lead Manager Quotes

“On this transaction, the World Bank demonstrated once again its strong sponsorship from the global investor base, particularly central banks and official institutions. In a difficult market backdrop, they succeeded in securing over 60% of support from this investor segment. This US dollar benchmark rounds off an incredible series of seven-dollar financings for a total of US dollar 40 billion from the funding team over the fiscal year,” said Adrien de Naurois, Managing Director & Head of EMEA Investment Grade Syndicate, BofA Securities.

“We are delighted to be involved in one of the World Bank's final US dollar benchmark outing for their 2020/21 fiscal year and first 5-year benchmark since October 2020. With this transaction, the World Bank has achieved their tightest pricing spread vs. mid-swaps since 2018 and one of the lowest Treasury spreads in the sector year-to-date. This transaction comes near the end of the World Bank funding year in the public USD market, and caps a series of landmark issues. Congratulations to the World Bank Treasury team on the success of their dollar funding program this year,” said Philip Brown, Head of SSA DCM, Citi.

“The World Bank remains a market leader in US dollar Sovereign, Supranational and Agency (SSA) issuance since the pandemic started, having now issued its seventh US dollar fixed rate benchmark in the 2020-2021 fiscal year. The USD 2.5 billion Sustainable Development Bond was priced at IBRD’s tightest mid-swap reoffer spread for the 5-year tenor since 2018. J.P. Morgan was proud to again partner with the World Bank team in this important funding exercise, whose net proceeds will go towards achieving the World Bank’s twin goals of eliminating extreme poverty and promoting shared prosperity,” said Keith Price, Head of Frequent Borrower Group, J.P. Morgan.

“In what has been an extraordinary period of unprecedented market conditions, the World Bank continues to demonstrate broad market access supported by the highest quality real money investors. In today’s trade, central banks and official institutions continued their strong run of dominating the orderbooks (63%), ably supported by the usual granular participation of real money, especially from the United States where the World Bank continues to be held in particularly high esteem. This reflects not just the World Bank’s top tier credit quality but more importantly a continued investor relations effort to engage and educate investors,” said Spencer Dove, Head of SSA DCM, Nomura.

Transaction Summary

For more information on the World Bank Group and COVID-19: www.worldbank.org/en/who-we-are/news/coronavirus-covid19

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 is the original member of the World Bank Group and operates as a global development cooperative owned by 189 nations. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to support the Sustainable Development Goals and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing sustainable development bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. More information on World Bank bonds is available at 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. The World Bank’s Sustainable Development Bond Impact Report describes how the World Bank engages with investors on the SDGs and raises awareness for specific development challenges.

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, The World Bank
+1 202 477 2880
debtsecurities@worldbank.org