The international financial institution World Bank has priced a $2.5 billion 5-year Sustainable Development Bond maturing in July 2026.
The deal has attracted a wide range 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.
According to the bank statement, “Investors included those incorporating Environmental, Social and Governance (ESG) criteria in their investment process, as well as those looking to achieve positive impact through the selection of issuers, like the World Bank, that integrate climate action and sustainability throughout their operations.”
BofA Securities, Citi, JP Morgan, and Nomura are the lead managers for the transaction. The bond will be listed on the Luxembourg Stock Exchange, one of the world’s leading listing venues for sustainable securities.
Mr. Jingdong Hua, Vice President and Treasurer at World Bank said, “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. 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.”
“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 percent of support from this investor segment. This US dollar benchmark rounds off an incredible series of seven-dollar financings for a total of $40 billion from the funding team over the fiscal year,” stated Mr. 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.”
Mr. Keith Price, Head of Frequent Borrower Group, JP Morgan commented, “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 $2.5 billion Sustainable Development Bond was priced at IBRD’s tightest mid-swap reoffer spread for the 5-year tenor since 2018.”
“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 percent), 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,” noted Mr. Spencer Dove, Head of SSA DCM, Nomura.