Key Impact Points:

• Successful Issuance: The World Bank’s 10-year GBP bond raised £700 million, exceeding initial targets.
• Attractive Returns: The bond offers a 4.25% annual coupon and a yield of 4.321%.
• Investor Confidence: Strong demand reflects the World Bank’s credit appeal and commitment to sustainable development.

Bond Pricing and Details

On October 15, 2024, the World Bank priced a 10-year GBP-denominated benchmark bond, raising £700 million to support sustainable development activities in its member countries. The bond matures in October 2034 and offers an annual coupon of 4.25% with a yield of 4.321%.

Strong Investor Demand

Jorge Familiar, Vice President and Treasurer of the World Bank, stated, “We are happy to be able to offer investors a new 10-year pound sterling-denominated World Bank bond, fulfilling pent-up demand for safe and liquid investments in the currency and tenor.”

The bond was priced at +11.3 basis points over the 4.5% UK Gilt due September 2034, with joint lead managers including Citi, Morgan Stanley, NatWest Markets, and Santander.

Related Article: Middle East Issued $16.7 Billion in Sustainable Bonds from January to September 2024: S&P Global Ratings

Market Impact and Investor Support

Ebba Wexler, Head of SSA DCM at Citi, noted, “The quality of the orderbook, with a strong central bank component, is true evidence of the World Bank’s credit appeal among GBP investors.” The bond’s size increased from the original £500 million to £700 million, showcasing robust investor interest.

Ben Adubi, Head of SSA at Morgan Stanley, added, “Today’s transaction highlights the support the World Bank continues to receive from investors who remain strong supporters of its goal of ending extreme poverty and promoting shared prosperity.”

Competitive Positioning

Damien Carde, Managing Director at NatWest Markets, remarked, “This signifies the tightest gilt spread across the SSA sector since January 2006.” The bond’s issuance reflects the World Bank’s ability to capture demand in challenging maturity points.

Ali Nauman, Executive Director at Banco Santander, emphasized, “This issuance supports the World Bank’s sustainable development mandate, and Santander is delighted to have been involved.”

Conclusion

The World Bank’s successful issuance of the 10-year Sustainable Development Bond underscores strong investor confidence and commitment to sustainable development initiatives. The raised funds will play a crucial role in financing projects aimed at fostering inclusive growth in member countries.