Washington, D.C., May 7, 2020 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a USD 4 billion 10-year global benchmark bond that matures on May 14, 2030.
Strong demand from global investors for the USD benchmark led to an orderbook of USD 5.6 billion, with over 130 investor orders, anchored by central banks and official institutions. Other investors included bank treasuries, asset managers, as well as pension and insurance funds.
The 10-year benchmark pays a semi-annual coupon of 0.875% and has an issue price of 99.428%. It has a final spread of 31.45bps over the 1.50% US Treasury due February 15, 2030 reference bond, offering investors a yield of 0.935%. Joint lead managers for this transaction are BofA Securities, J.P. Morgan, Nomura and RBC Capital Markets.
“We appreciate the continued investor support for the World Bank and our development mandate. It allows us to serve our member countries, helping them safeguard their progress towards sustainable development – especially through this challenging period,” said Jingdong Hua, Vice President and Treasurer, World Bank. “This transaction is part of the World Bank’s issuance program, which raises funds to support projects and programs, including those providing immediate health responses and other projects directed to contain the impact of COVID-19.”
Investor Distribution
| By Geography | By Investor Type | ||
| Asia | 38% | Central Banks/Official Institutions 8anks/Bank Treasuries/Corporates | 57% |
| EMEA | 35% | Bank/Bank Treasuries/Corporates | 24% |
| Americas | 27% | Asset Managers/Insurance/Pension Funds | 19% |
“Another fantastic transaction by the World Bank, met once again by strong demand from over 130 accounts across geographies. A solid orderbook enabled the World Bank to print the first 10-year Sovereign, Supranational and Agency (SSA) trade in almost 4 months, while highlighting its ongoing support to developing countries. Congratulations to the whole team,” said Adrien de Naurois, Head of EMEA IG Syndicate & DCM SSA at BofA Securities
“The World Bank reopens the 10-year maturity in style, with a USD 4 billion Sustainable Development Bond on the back of a USD 5.6 billion orderbook. The issuer took advantage of the consistently improving market sentiment to launch the first 10-year USD SSA benchmark since January. Despite outright yields at such low levels, the trade became the largest 10-year benchmark in the USD SSA space since 2014, thanks to strong and widespread support from IBRD’s global investor base, topping 130+ orders. A timely move to tap into pent-up demand for duration, and another very successful funding exercise for the World Bank Treasury team!” said Keith Price, Head of Frequent Borrower Group, J.P. Morgan
“Once again the World Bank has demonstrated clear market leadership with a hugely successful 10-year Sustainable Development Bond. The transaction marks only the second 10-year SSA trade this year and will provide the market with the confidence that this sector of the curve is truly open despite the new yield environment. With over 130 investors participating, this transaction is a testament to World Bank’s global appeal and that its mandate clearly resonates with investors,” said Spencer Dove, Head of SSA DCM at Nomura
“The World Bank has always been at the forefront when it comes to helping its member countries cope with challenges and few can match the speed of their response to the COVID-19 pandemic. A USD 4 billion 10-year bond is a spectacular result in any market, and the success of this transaction once again highlights World Bank’s very special global franchise. It is particularly gratifying to see the market uniting to support Good Health and Wellbeing goals at this critical juncture, and we at RBC were honored to be part of this very important transaction,” said Jigme Shingsar, Managing Director, RBC Capital Markets
