World Bank Prices NZD 800 Million Sustainable Development Bond

WASHINGTON  The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) has priced a New Zealand dollar 800 million 5-year 4.25% fixed-rate bond due July 29, 2027. The benchmark bond was launched with an initial minimum target size of NZD 300 million and was increased due to strong investor demand.

The deal priced at 99.915263% to yield 4.269% p.a. semi-annual. This equates to a spread of 58.4 basis points over the New Zealand Government Bond due April 2027.

The joint-lead managers for the transaction are ANZ, Commonwealth Bank of Australia, and Westpac Institutional Bank.

“We are delighted to be back in the market with a liquid NZD global bond,” said Jorge Familiar, Vice President and Treasurer, World Bank. “This is a great result – we thank NZD investors for their strong support of sustainable development projects and programs in World Bank member countries.”

Investor Distribution

By Geography By Investor Type
New Zealand 89% Banks/Bank Treasuries 79%
EMEA 6% Asset Managers/Insurance/Pension Funds 21%
Asia 4%
Americas 1%    

Joint Lead Manager Quotes

“Kauri bond investors welcomed the World Bank back for their first primary outing since November 2021, and the diversity of investors that the World Bank attracted was a positive development for the market.  While the environment does remain challenging, this impressive NZ$800m result from World Bank has boosted the Kauri primary market to a record setting pace for 2022, and ANZ was privileged to be involved with the transaction,” said Glen Sorensen, Bond Syndicate, ANZ NZ.

“There was a strong investor response to this latest World Bank Sustainable Development Bond Kauri transaction, making them the largest issuer of outstanding bonds by volume in the New Zealand dollar bond market. The Kauri market remains globally competitive for borrowers, while the Sovereign, Supranational and Agency sector offers a meaningful pick-up for investors relative to other New Zealand high grade paper. We are delighted to have worked with the World Bank team on another successful New Zealand dollar transaction,” said Desmond Fennell, CBA Managing Director of Capital Markets and Syndicate, Commonwealth Bank of Australia.

“Congratulations to the World Bank in navigating a volatile backdrop and executing another highly successful Kauri transaction. The final outcome achieved is a real testament to World Bank’s standing and it’s continued dedication to the Kauri market. Westpac was very pleased to be involved,” said Mat Carter, Head of Debt Capital Markets & Syndicate, Westpac Institutional Bank.

Transaction Summary

Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa/AAA
Amount: NZD 800,000,000
Settlement date: July 29, 2022
Minimum Subscription: NZD 1,000 (within New Zealand, NZD 100,000)
Minimum denominations and minimum holding: NZD 1,000 and multiples thereof (within New Zealand, NZD 100,000 with multiples of NZD 1,000 thereafter)
Format: Registered notes
Coupon: 4.250% per annum, payable semi-annually
Maturity date: July 29, 2027
Re-offer price: 99.915263%
Re-offer yield: 4.269% p.a. semi-annual
Listing: Luxembourg Stock Exchange
Clearing systems: NZ Clear
Joint lead managers: ANZ, Commonwealth Bank of Australia, Westpac Institutional Bank