World Bank prices Sustainable Development Bonds for investors

THE WORLD Bank’s International Bank for Reconstruction and Development (IRBD) recently priced two Sustainable Development Bonds – a $3bn, two-year bond maturing in April 2023 and a $5bn, seven-year bond maturing in April 2028.

The transactions provided options for a variety of investors seeking short- and medium-term opportunities in the Supranational, Sovereign and Agency (SSA) market, where supply for two- and seven-year maturities is limited.

The transactions, which attracted over 250 orders with the order book reaching $14bn 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 two-year tranche priced at a semi-annual yield of 0.229 percent. This equates to a spread vs the reference US treasury of +6.98 basis points.  The seven-year tranche priced at a semi-annual yield of 1.377 percent. 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, World Bank vice-president and treasurer. “Investors have a critical role to play in channelling resources to sustainable development, particularly now.”