17. PARTNERSHIPS

World Bank Launches 2022 Funding Year with New 7 Year GBP Benchmark – World Bank Group

Written by Amanda



Washington, D.C., July 8, 2021 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) kicked off its new fiscal year with a 7-year British pound sterling (GBP) benchmark bond due July 2028.  The Sustainable Development Bond raised GBP 1 billion from investors globally to support the financing of its sustainable development activities.

The bond offers an annual coupon of 0.625% and an annual yield of 0.685%. It was priced at +28 basis points over the 0.125% UK Gilt due January 2028. Bank of America, Deutsche Bank, JP Morgan, and NatWest Markets are joint lead managers for the transaction. The bond will be listed on the Luxembourg Stock Exchange.

Jingdong Hua, World Bank Vice President and Treasurer, said, “With what is usually a slow time in the summer for market activity, we were very pleased to see such strong investor participation in our first IBRD benchmark of the fiscal year. Much remains to be done as the global community continues to respond and recover from the pandemic and the World Bank remains at the forefront supporting member countries in their response.  We thank investors for their support.”

The high-quality order book attracted over 40 investors. The majority of the transaction was placed with investors in the United Kingdom.

Investor Distribution 

By Geography

 

By Investor Type

 

United Kingdom

78%

Banks/Bank Treasuries/Corporates

57%

Europe

12%

Asset Mangers/Insurance/Pension Funds

23%

Asia

7%

Central Banks/Official Institutions

20%

Americas

3%

Joint Lead Manager Quotes

Adrien de Naurois, Managing Director, BofA Securities, said, An outstanding start for the World Bank’s new fiscal year with its first sterling outing of 2021. The issuer was able to navigate a volatile trading session on the back of continued support from its high quality and diversified investor base. This demonstrates once again the high standing of the World Bank’s credit and overall position in the capital markets.”

Katrin Wehle, Managing Director, SSA DCM, Deutsche Bank, said, The World Bank kicked off their financial year with a highly successful new GBP 1 billion 7-year Sustainable Development Bond. The superb reception of the deal from both high quality local as well as a diverse pool of global investors was reflected in the dynamic book building and oversubscription. This transaction reinforces the World Bank’s commitment towards supporting their sustainable development goals and cements its status as a benchmark issuer in the GBP market. A fantastic return to the sterling market and Deutsche Bank is proud to have supported this landmark transaction.”

Keith Price, Managing Director, Head of Frequent Borrowers Group, J.P. Morgan, said, “A stellar return to the sterling market from the World Bank to kick-start their new fiscal year and first GBP deal of 2021. By offering a new 2028 reference point with such a high quality orderbook, the transaction highlighted the World Bank’s exceptional standing amongst the UK investor base. J.P. Morgan was delighted to be involved.”

Kerr Finlayson, Managing Director, Head of Frequent Borrower Group Syndicate, NatWest Markets, said, “The World Bank continues to innovate in capital markets, bringing to market the first sterling 2028 maturity since 2001. By offering investors an attractive SONIA spread and creating a new reference point in 2028, they have once again been rewarded with strong demand from a loyal investor base. In the end, a GBP 1 billion print reiterates the high standing in which the World Bank’s credit is held amongst investors. The choice to issue in GBP as the first issuance of the new financial year underlines the World Bank’s sincere commitment to this market and we are incredibly proud to be involved at NatWest.

Transaction Summary 

Issuer

World Bank (International Bank for Reconstruction and Development, IBRD)

Issuer rating:

Aaa / AAA

Amount:

GBP 1,000,000,000

Settlement date:

15 July 2021

Maturity date:

14 July 2028

Issue price:

99.590%

Issue yield:

0.685% annual

Denomination:

GBP 1,000

Coupon:

0.625% per annum

Listing

Luxembourg Stock Exchange

ISIN

XS2365061931

Clearing systems

Euroclear/Clearstream Luxembourg

Joint lead managers

Bank of America, Deutsche Bank, JP Morgan, and NatWest Markets

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.

World Bank bonds support the financing of programs that further the Sustainable Development Goals (SDGs). World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association and as such support the financing of a combination of green and social, i.e., “sustainable development” projects, programs and activities in IBRD member countries as described in the World Bank Sustainable Development Bond Framework. The World Bank is also a member of the Executive Committee of the Green Bond, Social Bond, and Sustainability 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 World Bank’s Sustainable Development Bond Impact Report describes how the World Bank engages with investors on the SDGs and raises awareness for specific development challenges.

Disclaimers

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.

The net proceeds from the sale of World Bank securities are used to finance sustainable development projects and programs in World Bank’s member countries without being committed or earmarked for lending to, or financing of, any particular projects or programs. Returns on World Bank securities are not linked to the performance of any particular project or program.

Contact

Heike Reichelt
Head of Investor Relations and Sustainable Finance
World Bank Treasury
debtsecurities@worldbank.org
 

Source: worldbank.org

About the author

Amanda

Hi there, I am Amanda and I work as an editor at impactinvesting.ai;  if you are interested in my services, please reach me at amanda.impactinvesting.ai