World Bank’s CAD 1 Billion 7-year Sustainable Development Bond Reopens the Long-end of the CAD Market

WASHINGTON  – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a new 7-year CAD 1 billion benchmark that matures on September 18, 2030. This is the World Bank’s largest 7-year transaction in Canadian Dollars.

The 7-year benchmark transaction pays a semi-annual coupon of 4.25% p.a. and has an issue price of 99.844% and a final spread of 52 bps over the CAN 1.25% June 1, 2030, reference bond, offering investors a yield of 4.276% (semi-annual). Joint lead managers for this transaction are CIBC, RBC Capital Markets, National Bank Financial and Scotiabank.

“It has been a busy week for the World Bank, as we conclude successful transactions in three different currencies EUR, GBP and now in CAD. We are pleased to re-enter the Canadian market for the first time this fiscal year and thank our investors for a continued support in the World Bank’s sustainable development mandate,” said Jorge Familiar, Vice President and Treasurer, World Bank.

Investor Distribution

By Investor Type By Geography
Central Banks/Official 55% Americas 43%
Asset Managers/Insurance/Pension Funds 23% Asia 37%
Banks/Bank Treasuries/Corporates 22% Europe/Middle East/Africa 20%

“In bringing the first 7-year Sovereign Supranational Agency (“SSA”) CAD bond offering since July 2021, the World Bank leveraged its pre-eminent role in the Canadian dollar market to re-open an important sector of the curve. Today’s transaction is noteworthy given the significant and diverse participation from Central Banks and Official Institutions in a Canadian dollar transaction. The World Bank is the ideal issuer to pave the way for others to consider longer tenors in the Canadian dollar market.” said Priya Radha, Managing Director & Global Head, Government Solutions, CIBC Capital Markets.

“In a CAD SSA market dominated by 3 to 5-year issuance, the World Bank has reopened the market for longer maturities with what is the first SSA 7-year benchmark supply since July 2021. That they were able to do this in convincing fashion with a heavily oversubscribed CAD 1 billion benchmark issue size demonstrates the special access World Bank enjoys with Canadian dollar investors and should encourage others to extend their curve in this market,” said Jigme Shingsar, Managing Director, US Debt Capital Markets, RBC Capital Markets.

“The World Bank once again proves to be a leader in Canadian Fixed Income Markets while simultaneously promoting a focus on sustainability. The World Bank was able to drive one of the largest ever CAD SSA 7-year bonds with an extremely high quality and diverse book. Being able to satisfy growing CAD needs out the curve demonstrates that the World Bank is willing to continue to develop an important global market where duration and liquidity are in high demand. NBF was pleased to partner with the World Bank on this highly successful transaction,” said Scott Graham, Managing Director, National Bank Financial.

“We congratulate the World Bank on successfully re-opening the 7-year CAD global bond market. The result was a highly successful CAD 1 billion 7-year Sustainable Development Bond benchmark, which showed broad participation from high quality Domestic and International investors.  Scotiabank was delighted to be involved on such an important issuance,” said Cesare Roselli, Global Head of SSA Origination, Scotiabank.

Summary Terms:

Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa/AAA (Moody’s/S&P)
Amount: CAD 1,000,000,000
Settlement date: September 18, 2023
Maturity date: September 18, 2030
Issue price: 99.844%
Issue yield: 4.276 % semi-annually
Coupon: 4.25% per annum
Denomination: CAD 1,000
Listing: Luxembourg Stock Exchange
Clearing system: CDS, Clearstream, Euroclear
Joint lead managers: CIBC, RBC Capital Markets, National Bank Financial Inc., Scotiabank