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World Bank’s USD 3 Billion Sustainable Development Bond Highlights Investor Confidence

World Bank’s USD 3 Billion Sustainable Development Bond Highlights Investor Confidence

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The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 10-year benchmark sustainable development bond that matures in November 2033.  The Sustainable Development Bond raised USD 3 billion from a group of globally diverse investors to support the World Bank’s efforts to create a world free of poverty – on a livable planet.

The transaction attracted orders totaling more than USD 4.2 billion led by official institutions, followed by bank treasuries and asset managers.  Investors focused on the World Bank’s triple-A credit, its classification as a high-quality liquid asset, as well as the sustainable development use of funds to achieve positive social and environmental impact in member countries.

The lead managers are BMO Capital Markets, J.P. Morgan, RBC Capital Markets, and Wells Fargo Securities.  The sustainable development bond will be listed on the Luxembourg Stock Exchange, offers a spread of 20.3 basis points versus the reference US Treasury, with a semi-annual yield of 4.788%.   

“Many of the global investors that supported today’s transaction are some of the World Bank’s longest and most steadfast partners, helping us to multiply our impact,” said Jorge Familiar Vice President and Treasurer, World Bank. “Their funds help us drive sustainable development and will lead to better quality of life in our member countries – access to clean air, clean water, education and better health care.”    

Investor Distribution

By Investor TypeBy Region
Central Banks/Official Institutions51%Asia39%
Banks/Bank Treasuries/Corporates26%Americas32%
Asset Managers/Insurance/Pension Funds23%Europe/Middle East/Africa (EMEA)29%

Lead Manager Quotes

“A stellar outcome from the World Bank on its first US dollar 10-year benchmark in nearly two years. With continued rate volatility in the market, navigating the long-end of the curve is no simple achievement, and to do so in USD 3 billion size is impressive. BMO was delighted to have been involved in this transaction!” said Sean Hayes, Head of US Syndicate, BMO Capital Markets.

Related Article: Green Construction to Create $1.5 Trillion in Investment Opportunities in Emerging Markets – World Bank’s IFC

“The World Bank moved quickly to take advantage of renewed depth at the long-end of the yield curve, following the latest wave of data and central bank meetings, launching one of the largest USD 10-year benchmarks this year – an impressive feat in one of the final funding windows of the year, and demonstrative of the depth of the World Bank’s global investor base.  Congratulations to the World Bank team,” said Sarah Lovedee, Executive Director, Head of Supranational DCM, J.P. Morgan.

“The World Bank seems to specialize in reopening markets after periods of significant volatility and uncertainty. This 10-year benchmark demonstrated that the World Bank retains unparalleled access to markets on behalf of its member countries and is a beacon for other borrowers to steer by.  Our congratulations to the World Bank Treasury team whose market acumen and persistent investor outreach efforts are the key factors in this successful transaction,” said Jigme Shingsar, Managing Director, RBC Capital Markets.

“One could not have expected a better result for this new 10-year benchmark transaction. A large and solid orderbook with a strong component of official institutions and top-class bank treasuries and other investors. At USD 3 billion, this transaction becomes one of the largest Sovereign, Supranational and Agency (SSA) transactions of the calendar year.  Congratulations to the World Bank team for getting everything right again,” said Carlos Perezgrovas, Head SSA Origination, Wells Fargo Securities.

Transaction Summary

 10-Year Bond
Issuer:World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating:Aaa /AAA
Amount:USD 3 billion  
Settlement date:November 14, 2023
Maturity date:November 14, 2033
Issue price:99.701%
Issue yield:4.788% semi-annual
Denomination:USD 1,000
Coupon:4.750%, payable semi-annually
Listing:Luxembourg Stock Exchange
Clearing system:Fedwire, Clearstream, Euroclear
Lead managers:BMO Capital Markets, J.P. Morgan, RBC Capital Markets and Wells Fargo Securities
Senior co-lead managers:          BNP Paribas, CIBC and National Bank of Canada

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