World Bank Issues Sustainable Development Bonds in Scandinavian Currencies and Raises Awareness for Food Loss

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced new Norwegian krone- and Swedish krona-denominated Sustainable Development Bonds raising approximately US$ equivalent 550 million while engaging with Scandinavian investors to raise awareness for the importance of combatting food loss and waste. These challenges are outlined by Sustainable Development Goal 12.3: halving food waste by 2030.

The NOK 4 billion 5-year floating rate bond and SEK 1 billion 5-year fixed rate bond both mature on October 23, 2025. The bonds are the first dual-tranche issuance for IBRD in Scandinavian currencies and the first time IBRD has launched a floating rate note in NOK. Nordea Bank Abp and Skandinaviska Enskilda Banken (SEB) acted as joint lead managers for these transactions.

Over 30 investors including Deka Investment, the Folksam Group, Handelsbanken Treasury, Kommunalbanken (KBN), Länsförsäkringar Treasury, Nordea Treasury and Asset Management, Odin Forvaltning, Sandnes Sparebank, Sbanken ASA, SpareBank 1 SMN, SpareBank 1 SR-Bank ASA, Sparebank 1 Østlandet, Sparebanken Sør, Sparebanken Vest, Storebrand Asset Management, Storebrand Bank ASA and Union Investment Privatfonds GmbH participated in the bonds. Scandinavian investors accounted for 95% of the NOK bond and 85% of the SEK bond with German, Japanese and UK based investors rounding out the remainder of investor participation.

“Supporting countries to address the climate and social impacts of food loss and waste is a key priority for the World Bank as we work together to eliminate extreme poverty and increase shared prosperity,” said Jingdong Hua, World Bank Vice President and Treasurer. “Food loss and waste affects us all. We thank Scandinavian investors for their support and are gratified to see continued attention to this challenge.”

“The Covid-19 pandemic has laid bare long-standing problems in the global food system,” said Geeta Sethi, Advisor and Global Lead for Food Systems, World Bank. “Food loss and waste reduction is a critical, yet underutilized, tool at the disposal of countries to help them address some of these challenges while meeting climate commitments and food security goals.”

“KBN, the Norwegian Agency for Local Governments, aims to be a leading financial institution in the area of climate risk, sustainability, and green finance solutions,” said Kristine Lien, Portfolio Manager, Kommunalbanken AS. “Through our Green Bond program, we finance the Norwegian local government sector’s transition to a climate-resilient and low-carbon society. Sustainable and more efficient food production, ensuring food security and safety alongside waste management are pressing concerns and play important roles in achieving targets in the Paris Agreement. KBN is proud to be contributing to this important work through participating in the IBRD’s Sustainable Development Bond to raise awareness for food loss and waste.”

“We are always on the lookout for investments that not only deliver favorable returns, but also promote sustainable social development,” said Jerk Matero, Senior Portfolio Manager, Nordea Asset Management. “Nordea Asset Management is pleased to support the World Bank in raising awareness of the challenges the world faces due to food loss and waste, as well as the positive impacts of tackling this global issue.”

“Sparebanken Vest was pleased to participate in the World Bank’s Sustainable Development Bond to raise awareness for food loss and waste,” said John Hopp, Head of Treasury, Sparebanken Vest. “This bond represents both a safe and sustainable investment for Sparebanken Vest. The World Bank has been a pioneer and leader in the rapidly growing ESG investment space. At Sparebanken Vest we are extremely focused on being a leader in Norway’s movement towards sustainable banking and socially responsible business practices. Investments like this align well with the bank’s own long-term ESG strategy.”

World Bank bonds support the financing of sustainable development projects and programs in member countries. This includes $4.6 billion in lending that IBRD is providing to middle-income countries to address food loss and waste from farm to fork, with investments in infrastructure, access to markets and logistics, and waste management. Reductions in food loss and waste can deliver diverse dividends, including combatting hunger, supporting sustainable food production, diets and consumption, and ultimately in addressing climate change, given that losses and waste generate eight percent of annual global greenhouse gas emissions.

The bond issuance comes shortly after the launch of the World Bank’s flagship report, Addressing Food Loss and Waste: A Global Problem with Local Solutions on the first International Day of Awareness for Food Loss and Waste Reduction on September 29, 2020 and will be followed by a virtual panel discussion on October 16, World Food Day, hosted by Nordea, including speakers from the World Bank and Nordic firms Too Good to Go and Swedbank Robur.

Since March 2019, when the World Bank launched the first Sustainable Development Bond to raise awareness of food loss and waste, a range of banks, asset managers, insurance companies and pension funds globally have shown their support. The World Bank has issued US$2.7 billion equivalent in over 35 Sustainable Development Bonds with investors to raise awareness for food loss and waste challenges.

Investor Breakdown by Type

NOK

SEK

Banks/Bank Treasuries/Corporates

81%

48%

Central Banks/Official Institutions

13%

2%

Asset Managers/Insurance/Pension Funds

6%

50%

Transaction Summary

Issuer:

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

Issuer rating:

Aaa /AAA (Moody’s/S&P)

Currency:

NOK

SEK

Maturity

5-year

5-year

Amount:

NOK 4,000,000,000

SEK 1,000,000,000

Settlement date:

October 23, 2020

October 23, 2020

Maturity date:

October 23, 2025

October 23, 2025

Issue price:

107.443%

99.975%

Issue yield:

DM+2

0.055%

Denomination:

NOK 10,000

SEK 10,000

Coupon:

3-month NIBOR + 150 bps paid quarterly

0.050% per annum

Listing:

Luxembourg Stock Exchange

Luxembourg Stock Exchange

ISIN:

XS2247545234

XS2247546554

Clearing system:

Euroclear/Clearstream

Euroclear/Clearstream

Lead managers:

Nordea Bank Abp and SEB

Nordea Bank Abp and SEB

About the World Bank

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