Globally Diverse Investor Demand Drives Oversubscription of World Bank USD 5 Billion Sustainable Development Bond

WASHINGTON  – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a 5-year benchmark bond that matures in July 2028. The Sustainable Development Bond raised USD 5 billion to support the World Bank’s work in developing countries to eradicate extreme poverty and boost shared prosperity in a sustainable manner.

The USD 5 billion transaction size matches the largest in the US dollar Sovereign, Supranational and Agency (SSA) market in 2023 and attracted nearly 150 orders totaling more than USD 8.2 billion appealing to investors seeking high credit quality and a liquid investment.  The transaction benefited from the World Bank’s track record as a global issuer with a 75-year history of conservative financial and risk policies, solid capital structure, and high levels of liquid assets.

Citigroup Global Markets Limited, RBC Capital Markets, LLC, The Toronto-Dominion Bank, and Wells Fargo Securities, LLC are the lead managers. The bond, which will be listed on the Luxembourg Stock Exchange, offers a spread versus mid-swaps of +37 basis points, equivalent to +13.25 basis points versus the reference US Treasury, and has a semi-annual yield of 3.536%.

“The World Bank’s strength as a triple-A issuer is especially important in challenging markets,” said Jorge Familiar Vice President and Treasurer, World Bank“The transaction benefited from the loyalty of a globally diverse investors base looking for safe and liquid assets and keen to support the World Bank’s efforts to secure sustainable, resilient and inclusive development for its member countries.”

Investor Distribution

By Geography By Investor Type
Europe/ Middle East/ Africa 43% Banks/Bank Treasuries/Corporates 43%
Americas 39% Central Banks/Official Institutions 40%
Asia 18%  Asset Managers/Insurance/Pension Funds 17%

Lead Manager Quotes

“Congratulations to the World Bank on an excellent outcome for their second fixed-rate US dollar benchmark of the 2023 calendar year. The final orderbook of USD 8.2 billion was dominated by high quality and geographically diverse demand from investors, including bank treasuries, central banks, and asset managers. This is once again testament to the appeal of the World Bank credit to global fixed income investors, and to their support for the World Bank’s work to achieve the Sustainable Development Goals,” said Ebba Wexler – Head of Global SAS DCM, Citi.

“The World Bank’s successful return to the USD benchmark market was the balance of liquidity, maturity and credit quality needed to reopen the market. The final size and the extremely high quality of the orderbook reflected investors natural tendency to favor the top-quality credits during periods of uncertainty.  The World Bank team is to be congratulated for their ongoing investor development efforts that has culminated in yet another perfectly timed transaction, “said Jigme Shingsar Managing Director, Debt Capital Markets, RBC.

“We congratulate the World Bank team for demonstrating remarkable agility following an extended period of market volatility. The strategic approach and diligent preparation for this long 5-year USD Sustainable Development Bond was rewarded with a high quality orderbook. The robust investor demand comfortably allowed for a successful USD 5 billion deal size and TD is honored to be involved in this stellar transaction from the World Bank”, said Laura O’Connor, Managing Director & Head of UK DCM, TD Securities.

“The market got what it needed, a high-quality, liquid and well-known name to reopen the primary space after recent financial volatility. The result, a solid transaction with an oversubscribed book and tighter pricing than initial pricing thoughts. The World Bank proves again it is the prime issuer in the benchmark market with this USD 5 billion long 5-year Sustainable Development Bond, the second USD 5 billion transaction achieved this calendar year. Congratulations to the World Bank team!” said Carlos Perezgrovas, Head SSA Origination, Wells Fargo Securities.

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