Global Investors Drawn to World Bank’s 10-Year US Dollar Sustainable Development Bond

New Delhi: The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 3.5 billion 10-year Sustainable Development Bond maturing in February 2031. The transaction, in the World Bank’s largest funding currency, appealed to investors seeking longer-dated US dollar bonds complemented by a sustainable development purpose that resonates especially with investors integrating Environmental, Social and Governance (ESG) criteria in their investment process. The deal attracted over 115 orders totaling more than $4.8 billion. Investors were globally diverse, with strong demand from central banks and official institutions as well as, pension funds, insurance companies and asset managers seeking high-credit quality assets to match their longer-term liabilities.

BofA Securities, Citi, JP Morgan, RBC Capital Markets are the lead managers for the transaction. The bond will be listed on the Luxembourg Stock Exchange.

The bond priced with a final spread to mid-swaps of +13 basis points and an equivalent annual yield of 1.278%. This equates to a spread vs. the reference US treasury of +18.25 basis points.

“We are grateful for investors’ support for this 10-year US dollar benchmark which helps to fund the World Bank’s efforts to help our member countries respond to the immediate crisis and achieve their sustainable development goals,” said Jingdong Hua, Vice President and Treasurer, World Bank. “Access to long-term consistent funding supports a green, inclusive, resilient and sustainable recovery.”

Lead Manager Quotes

“Another impressive result for the World Bank in executing this $3.5 billion 10-year benchmark. The transaction was met with strong investor demand, attracting over 100 orders. The combination of growing investor interest following the deal’s announcement and an extremely high quality orderbook allowed them to price at the tightest spread to mid-swaps in this tenor of any Sovereign, Supranational, and Agency (SSA) issuer in the past three years. Congratulations to the World Bank team on this landmark issuance,” said Adrien de Naurois, Head of DCM SSA & EMEA IG Syndicate, BofA Securities.

“The World Bank has yet again shown its market leading access to liquidity across the yield curve with a new $3.5 billion 10-year benchmark to kick-start their fixed-rate US dollar issuance for this calendar year. The precise timing of the transaction, ahead of the Lunar New Year holiday period, enabled broad distribution with the highest quality investors across geographies. It also allowed for the tightest 10-year US dollar SSA print versus mid-swaps in over two years. Citi is delighted to have been involved in this fabulous transaction,” said Philip Brown, Managing Director, Head of SSA DCM, Citi.

“The World Bank impresses once again with a new 10-year Sustainable Development Bond, printing a US dollar 3.5 billion benchmark at mid-swap +13 basis points – the issuer’s second-largest US dollar 10-year deal size to date, and tightest mid-swap spread since 2015 for this tenor. The US dollar 4.8+ billion of demand was driven by high-quality orders especially from central banks and official institutions, a testament to the World Bank’s solid standing among global investors as well as a well-timed transaction from the issuer side. Well done to the World Bank team!” said Keith Price, Head of Frequent Borrower Group, J.P. Morgan.

“The World Bank’s first US dollar fixed-rate benchmark of 2021 was completed with textbook execution that reinvigorated the SSA market with the tightest 10-year print vs. mid-swaps since late 2018. The World Bank’s Sustainable Development Bonds continue to see strong support from investors who flock to the combination of high credit quality and the opportunity to support such a globally important mission,” said Jigme Shingsar, Managing Director, RBC Capital Markets.

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