World Bank Starts its 2020 Benchmark Program with CAD 1.5 Billion Sustainable Development Bond While Raising Awareness for the Critical Role of Fresh and Saltwater Resources
The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 5-year global Sustainable Development Bond that raised CAD1.5 billion from institutional investors around the globe. BMO Capital Markets, RBC Capital Markets, Scotiabank, and TD Securities were joint lead managers for this transaction.
World Bank bonds support the financing of sustainable development projects and programs in member countries. The World Bank engages investors around specific development challenges and the Sustainable Development Goals (SDGs), including, in this case, SDG 6 (clean water and sanitation), and SDG 14 (life below water). As the largest multilateral funder for ocean and water projects in developing countries, the World Bank is committed to working with countries to ensure access to safe and clean water and for the sustainable use of ocean and marine resources. This includes avoiding pollution reaching oceans through better waste management.
Jingdong Hua, World Bank Vice President and Treasurer, said: “This is a great way to start the World Bank’s 2020 benchmark program. We are very pleased with the strong investor demand for the first World Bank benchmark bond of the new decade, and the continued support from investors for the World Bank’s development mandate. Investors are increasingly recognizing the essential role they can play in achieving the Sustainable Development Goals – including preserving freshwater and marine ecosystems.”
|Investor Distribution by Investor Type||Investor Distribution by Region|
|Asset Managers/Insurance/Pension Funds||39%||Canada||66%|
|Central Banks/Official Institutions||29%||Europe and Middle East||12%|
Joint Lead Manager Quotes
Sean Hayes, Managing Director and Head of US Syndicate at BMO Capital Markets, said: “World Bank rings in 2020 as the first borrower of the new decade to re-open Canadian Dollar primary markets, with bonds highlighting the World Bank’s commitment to sustainable development. Domestic buyers drove early momentum, with overseas investors quick to join the party, leading to a match of the World Bank’s largest ever CAD offering at CAD1.5 billion size. Investment for impact was on showcase, in support of the World Bank mission and its leadership role in pioneering sustainable debt capital markets.”
Jigme Shingsar, Managing Director – Debt Capital Markets at RBC Capital Markets, said: “World Bank’s triumphant re-opening of the CAD SSA market supports the theme of Canada becoming an ever more important market for global borrowers. The size of the transaction matches the World Bank’s previous record while the growing domestic demand highlights both the appeal of supporting SDGs as well as the exponential growth of the Canadian SRI market.”
Cesare Roselli, Global Head of SSA (Sovereign, Supranational, and Agency) Origination at Scotiabank, said: “Scotiabank was proud to support the World Bank CAD1.5 billion benchmark issue. The World Bank has an unparalleled track-record as an issuer able to meet the growing needs for highly rated assets that support the SDGs, and accordingly this transaction was well received by the growing Canadian ESG investment community.”
Paul Eustace, Managing Director, Head of EMEA Syndicate at TD Securities, said: “World Bank has a long-standing commitment to the Canadian dollar market. This newest Sustainable Development Bond raises awareness of the issuer’s work in the areas of clean water and sanitation as well as conserving life below water. The response from investors was predictably strong. This benchmark is a fantastic way for the World Bank to kick off a brand new decade of funding.”
|Issuer:||World Bank (International Bank for Reconstruction and Development, IBRD)|
|Issuer rating:||Aaa /AAA (Moody’s/S&P)|
|Settlement date:||January 16, 2020|
|Coupon:||1.900% per annum|
|Coupon payment dates:||Payable semi-annually on January 16 and July 16 of each year, beginning on July 16, 2020|
|Maturity date:||January 16, 2025|
|Reference Benchmark:||CAN 1.500% due September 1, 2024|
|Issue yield:||1.922% semi-annually|
|Denomination:||CAD1,000 x CAD1,000|
|Final redemption at maturity
(per Specified Denomination):
|Spread to Benchmark:||CAN 1½ 09/01/24 + 35.9bps|
|Listing:||Luxembourg Stock Exchange|
|Clearing system:||CDS, Clearstream, Euroclear|
|Joint lead managers:||BMO Capital Markets, RBC Capital Markets, Scotiabank, TD Securities|
With annual issuances between US$50-US$60 billion, World Bank bonds support the financing of programs that support the SDGs. 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.
The net proceeds from the sale of the bonds are used by the World Bank to finance sustainable development projects and programs in the World Bank’s member countries without being committed or earmarked for lending to, or financing of, any particular projects or programs. Returns on the bonds are not linked to the performance of any particular project or program.
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development (“IBRD”), also known in the capital markets as “World Bank”. Any offering of World Bank securities will take place solely on the basis of the relevant offering documentation including, but not limited to, the prospectus, term sheet and/or final terms, as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject to restrictions under the laws of several countries. World Bank securities may not be offered or sold except in compliance with all such laws.
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization. Created in 1944, it is the original member of the World Bank Group and operates as a global development cooperative owned by 189 nations. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to support the Sustainable Development Goals and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing sustainable development bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. More information on World Bank bonds is available at www.worldbank.org/debtsecurities.