World Bank Prices Dual Tranche 2-Year and 7-Year Benchmarks Catering to a Wide Range of Investors

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced two Sustainable Development Bonds – a USD 3 billion 2-year bond maturing in April 2023 and a USD 5 billion 7-year bond maturing in April 2028. The transactions provided options for a wide variety of investors seeking short-term and medium-term investment opportunities in the Supranational, Sovereign and Agency (SSA) market, where supply for 2- and 7-year maturities is limited.

The transactions, which attracted over 250 orders with the order book reaching USD 14 billion across both tranches, appealed to a broad and globally diverse group of investors seeking high credit quality alongside sustainable investment. There was strong demand from central banks and official institutions, banks and bank treasuries, as well as, pension funds, insurance companies and asset managers.

Barclays, BMO Capital Markets, TD Securities, and Wells Fargo Securities are the lead managers for both transactions. The bonds will be listed on the Luxembourg Stock Exchange.

The 2-year tranche priced at a semi-annual yield of 0.229%. This equates to a spread vs. the reference US treasury of +6.98 basis points. The 7-year tranche priced at a semi-annual yield of 1.377%. This equates to a spread vs. the reference US treasury of +8.88 basis points.

“World Bank funding in the capital markets continues to support our member countries’ efforts to implement a green, resilient and inclusive recovery to the coronavirus pandemic,” said Jingdong Hua, Vice President and Treasurer, World Bank. “Investors have a critical role to play in channeling resources to sustainable development, particularly now. We are pleased to be able to meet investors’ demand and delighted with the broad participation across both tenures while providing additional liquidity to the USD curve. We thank investors for their steadfast support.”

Investor Distribution: USD 3 Billion 2-Year

By Geography

By Investor Type

Americas

56%

Central Banks/Official Institutions

55%

Asia

22%

Asset Managers/Insurance/Pension Funds

26%

Europe/Middle East/Africa

22%

Banks/Bank Treasuries/Corporates

43%

Investor Distribution: USD 5 Billion 7-Year

By Geography

By Investor Type

Europe/Middle East/Africa

39%

Central Banks/Official Institutions

45%

Asia

32%

Banks/Bank Treasuries/Corporates

43%

Americas

29%

Asset Managers/Insurance/Pension Funds

12%

Lead Manager Quotes

“With this dual-tranche benchmark issuance the World Bank has once again delivered a hugely successful transaction,” said Lee Cumbes, Head of Public Sector EMEA, Barclays. “With a combined orderbook reaching in excess of USD 14 billion during the book build, investors have again demonstrated their strong appetite for the World Bank credit across the USD curve. Significantly, the 2-year reoffer level achieved the tightest USD SSA print vs. mid-swaps since 2018, with the 7-year, at USD 5 billion, also being the joint largest print in this tenor ever in SSA history (equaling only IBRD’s own efforts in 2020). As the World Bank continues to play a crucial role it is a privilege for Barclays to have worked on this transaction.”

“Amidst a primary market that felt reminiscent of January, there was incredible investor demand for World Bank paper on the short and long end of the USD curve,” said Sean Hayes, Head of US Syndicate & Credit Sales, BMO Capital Markets. “After kicking off 2021 with USD 3.5 billion of 2-year and 7-year SOFR floating rate notes, World Bank returns to the same tenors in fixed rate space to start Q2 with an USD 8 billion sized bang. It’s a feat you really only see the World Bank accomplish – over USD 14 billion of interest leading the way in support of two more liquid references on World Bank’s curve, both pricing at single digits over US Treasuries.”

“We congratulate the World Bank for an exceptional dual-tranche sustainable development bond transaction,” said Laura O’Connor, Managing Director, Fixed Income Origination & Syndication, TD Securities. “Amidst a busy primary pipeline, the 2-year and 7-year bonds responded to the investment needs of investors from both the public and private sector. Well done to the World Bank team on another outstanding USD benchmark transaction!”

“Wells Fargo congratulates the World Bank for yet another successful USD benchmark issuance!” said Carlos Perezgrovas, Head SSA Origination, Wells Fargo Securities. “This dual-tranche offering allowed World Bank to raise its target size in the front-end at the tightest spread vs. mid-swaps for a 2-year printed in the SSA sector, and also highlighted strong investor demand for duration with a sector record order book in the 7-year tranche. Once again, the World Bank exemplified its name and quality in the market, and as always it is a pleasure working with the funding team.”

Transaction Summary

2-Year Benchmark

7-Year Benchmark

Issuer:

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

Issuer rating:

Aaa /AAA

Amount:

USD 3 billion

USD 5 billion

Settlement date:

April 20, 2021

April 20, 2021

Maturity date:

April 20, 2023

April 20, 2028

Issue price:

99.793%

99.987%

Issue yield:

0.229% semi-annual

1.377% semi-annual

Denomination:

USD 1,000

USD 1,000

Coupon:

0.125% p.a., payable semi-annually in arrear

1.375% p.a., payable semi-annually in arrear

ISIN:

US459058JV60

US459058JW44

Listing:

Luxembourg Stock Exchange

Clearing system:

Fedwire, Clearstream, Euroclear

Lead managers:

Barclays, BMO Capital Markets, TD Securities, and Wells Fargo Securities

About the World Bank

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