World Bank Prices Dual Tranche AUD 800 Million Kangaroo Bonds While Highlighting Climate Action

WASHINGTON  – The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) today priced a new long-dated 5-year AUD 500 million Sustainable Development Bond and a tap of its existing November 2030 Sustainable Development Bond (bringing its total outstanding to AUD 1 billion). This transaction is part of the World Bank’s initiative to issue Sustainable Development Bonds while highlighting the urgency of mainstreaming climate action.

Since announcing the initiative, the World Bank has been engaging with investors to explain how its bonds support the financing of projects that contribute to climate action and how the World Bank’s updated Climate Change Action Plan helps countries integrate climate change into their development strategies and apply climate financing in ways that achieve the most positive impact. Applying a “whole of economy” approach with developing country clients helps the World Bank mainstream climate considerations across its portfolio, including in high emitting sectors as well as sectors not typically associated with climate action such as health, education, and trade. In fiscal year 2021, which ended June 30, 2021, ninety-five percent of all IBRD projects had climate components accounting for 33% of financing.

“We are excited to return to the Kangaroo market which has provided great support for the World Bank and its sustainable development mission over the years,” said Andrea Dore, Head of Funding, World Bank Treasury.“This dual tranche transaction provided an opportunity to engage investors with different maturity needs while highlighting how the proceeds from the Sustainable Development Bonds are used to support the financing of projects that contribute to climate action in developing countries.”

Investor Distribution: AUD 500 million Long 5-Year

By Type   By Region  
Asset Managers/Insurance/Pension Funds 61% Europe 31%
Banks/Bank Treasuries/Corporates 30% Australia 28%
Central Banks/Official Institutions 9% Japan 41%

Investor Distribution: AUD 300 Million Tap of 10-Year

By Type   By Region  
Asset Managers/Insurance/Pension Funds 46% Europe 49%
Banks/Bank Treasuries/Corporates 30% Japan 39%
Central Banks/Official Institutions 24% Australia 12%

Joint Lead Manager Quotes

“Today’s dual tranche Sustainable Development Bond Kangaroo issue is an outstanding result for the World Bank. The highly granular orderbook reaffirms the strong sponsorship the World Bank holds in the Australian market. The World Bank’s newly updated Climate Change Action Plan has resonated strongly with the Australian dollar investor community, with many accounts pointing to the new initiative in helping to highlight the importance of achieving positive climate impacts,” said Charles Davis, Managing Director, Sustainable Finance, Commonwealth Bank of Australia.

“An incredible outcome for the World Bank’s first Kangaroo dual-tranche benchmark bond this calendar year. The pricing of Asset Swap +18 basis points for the new 5.5-year line was also the tightest print for a Supranational, Sovereign and Agency (SSA) bond in the 2027 tenor. The combination of strong demand, quality of the orderbook and fine pricing is a testament to the World Bank’s perception as the ultimate supranational benchmark in the Kangaroo market. Deutsche Bank is honored to have supported the World Bank in this transaction and its important sustainable development mission,” said Craig Johnston, Director, Head of Australia & New Zealand Syndicate, Deutsche Bank.

“The new 5.5 year and the tap of the 2030 represent the World Bank’s focus on enfranchising both intermediate and long-end investors, and serves as another milestone in their 22 years of issuing in the Kangaroo market. Their Sustainable Development Bonds continue to promote awareness of the World Bank’s mandate and are incredibly well received as the global investor community increasingly looks to focus on sustainable assets,” said Oliver Holt, Head of Non-Japan Asia Debt Syndicate, Nomura.

“J.P. Morgan was delighted to be involved with the World Bank’s first Kangaroo benchmark of its new fiscal year, a successful dual-tranche trade which stands out as the largest SSA AUD issuance in a single outing since January this year. The reoffer spreads achieved were the tightest for both tenors in the SSA space year-to-date, and stronger-than-expected demand for the November 2030’s line allowed the issuer to bring the total outstanding amount to AUD 1 billion. Well done to the World Bank team,” said Ryan Chamberlain, Head of AUD Syndicate, J.P. Morgan.

Transaction Summary

  5-year 10-year
Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa/AAA
Amount: AUD 500,000,000 AUD 300,000,000 (total outstanding AUD 1,000,000,000)
Settlement date: October 22, 2021 October 22, 2021
Maturity date: April 22, 2027 November 18, 2030
Coupon: 1.35% p.a. payable semi-annual in arrear 1.1% p.a. payable semi-annual in arrear
Re-offer price: 99.828% 92.506%
Re-offer yield: 1.3825% semi-annual 2.0075% semi-annual
Denomination: AUD 1,000. The minimum consideration payable when issued
in Australia:  AUD 500,000
AUD 1,000. The minimum consideration payable when issued
in Australia:  AUD 500,000
Clearing systems: Austraclear / Euroclear / Clearstream
ISIN: AU3CB0283950 AU3CB0275998
Joint lead managers: CBA, Deutsche Bank, J.P. Morgan, and Nomura

For more information on the World Bank Group and Climate Action:

Comments are closed.