World Bank Prices a Euro 3 billion 8-Year Benchmark to Support Programs in Member Countries

The World Bank (International Bank for Reconstruction and Development, Aaa/AAA) today priced an 8-year EUR 3 billion benchmark bond to support the financing of sustainable projects and programs in its member countries.  The transaction helps to raise awareness for the World Bank’s activities to support its members as they address the human and economic impact of COVID-19.

BNP Paribas, Deutsche Bank, J.P. Morgan and Natixis are the lead managers for the transaction.

The EUR 3 billion bond attracted orders from over 80 investors from Europe, Asia and the Americas. It was priced with a final spread of 58.8 basis points over the 0.5% February 2028 reference Bund and offers a yield of 0.036%.

“We appreciate investor interest in this successful transaction. It helps to raise awareness for the World Bank’s sustainable development activities, including those that help reduce the spread and impact of COVID-19.  Projects and programs in member countries build on the existing health portfolio and other ongoing efforts that support their social and economic development,” said Jingdong Hua, Vice President and Treasurer, World Bank.  “The benchmark is an opportunity to provide investors with a liquid World Bank product for their Euro portfolios, and contributes to the World Bank’s diversified funding program.”

Investor Distribution

By Geography By Investor Type
Europe 65% Central Banks/Official Institutions 47%
UK  6 % Banks/Bank Treasuries/Corporates 39%
Asia 27%  Asset Managers/Pension/Insurance 14%
Americas 2 %    

Joint Lead Manager Quotes

“Another record size equaling EUR 3 billion benchmark of the year from the World Bank after their 7-year in January, but certainly all the more impressive given the much changed market backdrop post COVID-19. The quality of the orderbook was superb and illustrated the enviable position that the World Bank commands with leading central bank and real money investors across the globe. This success also highlights that the World Bank have firmly established themselves as the leading non-European liquid supranational, sovereign and agency (SSA) benchmark in the EUR markets,” said Jamie Stirling, Global Head of Sovereign, Supranationals and Agencies (SSA) Debt Capital Markets, BNP Paribas.

“The World Bank successfully complemented its growing EUR curve by another liquid point in 8-years. Once again, the World Bank benefited from its continuous investor work in the Euro space, attracting a high quality and granular orderbook, which made the EUR 3 billion size possible. We are delighted to be involved in a transaction that not only underscores the recognition by the Euro investor base of the World Bank’s credit quality, but also and more importantly, the current focus of the Word Bank on deploying financing to strengthen member countries’ health systems in their fight against COVID-19,” said Katrin Wehle, Managing Director, SSA Origination, Deutsche Bank.

“In true World Bank fashion, the issuer today reopens Euro benchmark issuance in the non-European supranational space – with an impressive EUR 3 billion 8-year Sustainable Development Bond highlighting SDG #3: Good Health & Wellbeing.  The issuer strategically chose the 8-year tenor in order to offer investors positive yield, and as a result saw a granular and high quality following especially from global central banks and official institutions, as well as European bank treasuries.  Despite deviating from the standard benchmark maturities, the 8-year transaction was sized at the largest end of the range for World Bank’s recent EUR benchmarks, being the issuer’s third EUR benchmark outing this year.  Well done to the World Bank team for a successful week!”, said Keith Price, Head of Frequent Borrower Group, J.P. Morgan.

“The World Bank (IBRD) has successfully launched a new Sustainable Development Bond for a significant size of EUR 3 billion, marking its third jumbo trade of this year in Euro. We are honored to have the occasion once again to work alongside the IBRD team. This issuance is part of the effort led by the World Bank to raise awareness for its response to the COVID-19 pandemic and aid the global fight to ensure the SDG #3 Good Health & Well-Being, for which every actor should feel proud to be a part of today.  We look forward to future endeavors on behalf of the World Bank as they continue to achieve new heights in the Euro space,” said Emmanuel Smiecench, Head of Supras & Sovereigns Syndicate, Natixis.

Transaction Summary

Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa/AAA
Amount: EUR 3 billion
Settlement date: April 24, 2020
Maturity date: April 24, 2028
Issue price: 99.792%
Coupon: 0.01% p.a.
Denomination: EUR 1,000
Listing: Luxembourg Stock Exchange
Lead managers: BNP Paribas, Deutsche Bank, J.P. Morgan and Natixis
ISIN: XS2160861808

With annual issuances between US$55-US$65 billion, World Bank bonds support the financing of programs that further the Sustainable Development Goals. World Bank bonds are aligned with the sustainability bond guidelines published by the International Capital Markets Association (ICMA). The World Bank is also a member of the Executive Committee of the Green Bond and Social Bond Principles. A key priority for the World Bank’s capital markets’ engagement is building strategic partnerships with investors to promote the importance of private sector financing in sustainable development.

Comments are closed.