World Bank’s EUR 2 Billion 40-Year Sustainable Development Bond Responds to Long-End Euro Investor Demand

Washington: The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced its first Euro-denominated benchmark of 2021, a EUR 2 billion 40-year Sustainable Development Bond maturing in January 2061. It was the issuer’s first Euro denominated benchmark bond in the tenor. The transaction was timed to respond to investors seeking high credit investment options, long duration, as well as diversification to non-European issuers. The deal attracted over 110 orders totaling more than Euro 3.6 billion. There was particular interest from pension funds, insurance companies, as well as asset management firms looking for investment opportunities that help manage the duration of long-term liabilities.

BofA Securities, Goldman Sachs International, HSBC and Natixis are the lead managers for the transaction. The bond will be listed on the Luxembourg Stock Exchange.

The bond priced with a final spread to mid-swaps of +23 basis points and an equivalent annual yield of 0.203%. This equates to a spread vs. the reference Bund of +31.5 basis points.

“We are pleased to be able to respond to investor demand for long-dated Euro denominated bonds from diverse and high-credit quality issuers with this transaction,” said Anshula Kant, Managing Director and Chief Financial Officer, World Bank Group.“Raising funds at efficient costs, as we have done again with this transaction, maximizes the World Bank’s support for sustainable development projects and programs in our members countries, so that they can overcome immediate challenges and reach their long-term development objectives.”

Lead Manager Quotes

“Congratulations to the World Bank team on their 40-year Euro transaction. They achieved a truly exceptional result with a large and diverse investor interest reflected in their longest dated benchmark deal to date. Going forward, this transaction will establish a valuable new reference point for Euro investors,” said Adrien de Naurois, Managing Director of SSA Syndicate, BAML.

“A truly fantastic outcome for the World Bank, executing their longest EUR benchmark to date. The World Bank capitalized on strong demand for duration, collecting an orderbook of exceptional quality and enabling them to price the largest transaction in this segment by a supranational entity, at the same level as their 30-year EUR benchmark in November. This is especially impressive because the trade priced at a level consistent with its peer group despite the World Bank not being included in the European Central Bank’s Pandemic Emergency Purchase Programme. Many congratulations to the World Bank team on this incredible success,” said Maud Le Moine, Head of SSA Origination, Goldman Sachs International.

“The World Bank has once again demonstrated its ability to set new precedents in the international capital markets, printing the first 40-year Euro benchmark from a non-European Supranational, Sovereign and Agency (SSA) issuer to date. The World Bank’s ability to access this very rare tenor for an impressive EUR 2 billion print is a notable achievement. This, combined with the pricing the World Bank was able to achieve, underlines the World Bank’s strong recognition and support from capital markets investors,” said Asif Sherani, EMEA Head of Syndicate, HSBC.

“The transaction accomplished by the World Bank today speaks for itself. This was an astounding result for an audacious 40-year issuance which provided duration and diversification, impressing both peers and investors alike. It is always a privilege to team together with the World Bank as they continue to demonstrate their dynamism as a leader in the Euro market. We can only imagine what awaits this issuer in the future, but for today hope they enjoy the results of their hard work,” said Emmanuel Smiecench, Co-Head Public Sector, Natixis.

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