The World Bank’s International Bank for Reconstruction and Development (IBRD) has raised $6.5 billion through the issuance of two Sustainable Development Bonds, marking the largest order book in the institution’s history. The dual-tranche offering included a $3 billion 2-year bond and a $3.5 billion 10-year bond, both aimed at supporting global sustainable development initiatives.
The dual-tranche offering attracted over 300 orders, totalling more than $22.7 billion, reflecting the demand for sustainable investment opportunities. The 2-year bond, maturing in August 2026, was priced at a spread of +6.9 basis points over the US Treasury, yielding 4.061% semi-annually. The 10-year bond, maturing in August 2034, was priced at a spread of +13.9 basis points, yielding 3.951% semi-annually. Both bonds, which carry a coupon rate of 4% p.a. and 3.875% p.a. respectively, will be listed on the Luxembourg Stock Exchange.
Investor interest was strong and diverse, the 2-year bond was predominantly subscribed by central banks and official institutions, which accounted for 75% of the orders. Banks and corporates made up 19%, while asset managers, insurance companies, and pension funds contributed 6%. The 10-year bond saw a broader distribution, with 43% of orders coming from central banks and official institutions, 31% from banks and corporates, and 26% from asset managers, insurance companies, and pension funds.
Geographically, the 2-year bond attracted significant interest from investors in the EMEA region (44%), followed by the Americas (28%) and Asia (28%). The 10-year bond also saw strong demand from EMEA (55%), with additional participation from the Americas (30%) and Asia (15%).
Barclays, BMO Capital Markets, Citigroup Global Markets, and HSBC Bank acted as joint lead managers for the transaction. The bonds will be cleared through Fedwire, Clearstream, and Euroclear systems. The proceeds will support various sustainable development projects in World Bank member countries, promoting inclusive growth and contributing to global efforts towards sustainability.
“This USD dual tranche issuance is a testament to the global investment community’s continuous support for the World Bank,” said Jorge Familiar, Vice President and Treasurer of the World Bank, adding “The overwhelming interest for bonds in both maturities with a record-breaking order book for a World Bank transaction underscore the demand for safe and liquid investments combined with the opportunity to foster sustainable development in World Bank member countries.”
“Congratulations to the World Bank team for their first Fixed Rate benchmark of the new fiscal year, with a record-setting dual-tranche USD transaction that secured strong investor demand without compromising on pricing. The deal, which generated the largest ever multi-tranche orderbook for a World Bank transaction whilst pricing at this year’s tightest spread to treasuries – reaffirms the borrower’s leading position in the SSA market and the continuous support from its global investor base. We are honored to have supported this new issue,” said Alex Paterson, Managing Director, Head of SSA DCM, Barclays.
“The strategic access to both ends of the maturity spectrum has captured the attention of a massive investor set. The fine-tuned and high-quality allocation process will ensure bond placement into a global and diverse buyer base in driving the World Bank’s mission to support sustainable development activities in member countries,” said Edward Mizuhara, Managing Director, Public Sector Syndicate, BMO Capital Markets.
“With this transaction, the World Bank re-opened the post-summer USD market and priced the largest USD SSA deal since April 2021,” said Ebba Wexler, Head of SSA DCM, Citi.
” The transaction attracted a strong and diverse orderbook across the tranches with a combined demand of over USD 22.7 billion. HSBC is delighted to have played a role in this transaction,” said Asif Sherani, Head of DCM Syndicate and Head of Public Sector DCM, HSBC.
