World Bank Prices CAD 1.5 Billion Sustainable Development Bond to Support its Member Countries

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a 5-year CAD 1.5 billion global benchmark bond that matures on July 2, 2025. The World Bank launched the Sustainable Development Bond while raising awareness for the World Bank’s projects and programs that provide support to its member countries in response to the health, social and economic impacts of COVID-19.

Extremely strong demand from global investors for the CAD benchmark led to an orderbook of over CAD 1.7 billion, with 55 investor orders, anchored by central banks and bank treasuries. Other investors included other official institutions, asset managers, as well as pension and insurance funds.

The 5-year benchmark pays a semi-annual coupon of 0.75% and has an issue price of 99.788% % and a final spread of 40.9bps over the 0.5% CAN September 2025 reference bond, offering investors a yield of 0.793% (semi-annual). Joint lead managers for this transaction are BofA Securities, RBC Capital Markets, Scotiabank and TD Securities.

“We are delighted to see such strong demand for the World Bank’s Sustainable Development Bonds in the Canadian dollar market with the World Bank’s development mandate and impact strongly resonating with investors,” said George Richardson, Director, Capital Markets, World Bank. “With their allocations and decision-making, investors are increasingly acknowledging the important role capital markets can play in response to the COVID-19 crisis, while also supporting long-term global priorities like the Sustainable Development Goals.”

Investor Distribution

Investor Distribution by Investor Type

Investor Distribution by Region

Banks/Bank Treasuries/Corporates

35%

Americas

51%

Asset Managers/Insurance/Pension Funds

33%

Europe/Middle East/Africa

31%

Central Banks/Official Institutions

32%

Asia

18%

“An outstanding return by the World Bank to the Canadian dollar market, once again demonstrating the broad investor appeal of their Sustainable Development Bonds. A high quality orderbook with over 50 orders is testament the World Bank’s ability to attract long-term buyers globally. Congratulations to the entire team,” said Adrien de Naurois, SSA Syndicate, BofA Securities.

“The World Bank has reopened the CAD market in spectacular fashion highlighting the impressive growth of the investor base for Sustainable Development Bonds in Canada. This record of success is a testament to the quality of the World Bank credit as well as its pioneering work in developing the market for ESG bonds in Canada and around the world. The Sustainable Development Goals highlighted by this issuance perfectly encapsulated the key global themes dominating our current events and once again demonstrates the World Bank’s leadership in responding to global challenges,” said Jigme Shingsar, Managing Director, RBC Capital Markets.

“Scotiabank was proud to support the World Bank’s CAD 1.5 billion bond issuance. The transaction highlighting the World Bank’s focus on health and support to the Sustainable Development Goals (#1 No Poverty, #3 Good Health and Wellbeing, #5 Gender Equality, #10 Reduced Inequalities) recognizes current key global issues. The strong and growing domestic take-up of the bond issue provides evidence that these development goals resonated extremely well with the Canadian sustainable finance and ESG investment communities,” said Cesare Roselli, Global Head of SSA Origination, Scotiabank.

“Today’s benchmark deal was a superb return to the CAD market for the World Bank. This new line adds further liquidity to their CAD benchmark curve and was well supported by both domestic and international investors. The final outcome – a new CAD 1.5 billion 5-year benchmark is a testament to the World Bank’s track record of issuance in the Canadian dollar market,” said Paul Eustace, Managing Director, Head of EMEA Syndicate, TD Securities.

With annual issuances on average between US$55-US$65 billion, World Bank bonds support the financing of programs that further the Sustainable Development Goals. World Bank bonds are aligned with the sustainability bond guidelines published by the International Capital Markets Association (ICMA). The World Bank is also a member of the Executive Committee of the Green Bond and Social 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 for sustainable development.

Summary terms:

Issuer:

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

Issuer rating:

Aaa/AAA

Amount:

CAD 1.5 billion

Settlement date:

June 19, 2020

Maturity date:

July 2, 2025

Issue price:

99.788%

Issue yield:

0.793% semi-annually

Coupon:

0.750% per annum

Denomination:

CAD 1,000 x CAD 1,000

Listing:

Luxembourg Stock Exchange

Lead managers:

BofA Securities, RBC Capital Markets, Scotiabank, TD Securities

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