The World Bank (International Bank for Reconstruction and Development, IBRD) has issued a GBP 700 million ($910 million) 10-year Sustainable Development Bond, raising funds to support sustainable development projects in its member countries. This bond, which matures on 23 October 2034, offers a 4.25% annual coupon and was priced at +11.3 basis points over the 4.5% UK Gilt due September 2034, yielding 4.321% annually. Citi, Morgan Stanley, NatWest Markets, and Santander served as joint lead managers for the issuance, which will be listed on the Luxembourg Stock Exchange.
The issuance attracted significant interest from investors, with 54% of the bond purchased by UK-based investors, followed by 31% from Asia, 8% from the EMEA region, and 7% from the Americas. Investor types were led by central banks and official institutions, which accounted for 60% of the total, followed by banks, treasuries, and corporates at 27%, and asset managers, insurers, and pension funds comprising the remaining 13%. The bond, issued at a price of 99.433%, will settle on 23 October 2024, with a denomination of GBP 1,000 and annual coupon payments each 23 October. It will be cleared through Euroclear and Clearstream, under the ISIN XS2923391606.
Jorge Familiar, Vice President and Treasurer of the World Bank said, “We are happy to be able to offer investors a new 10-year pound sterling-denominated World Bank bond, fulfilling pent-up demand for safe and liquid investments in the currency and tenor. This transaction underscores the World Bank’s commitment to diversifying its funding sources and highlights our strategic role in mobilising resources to support inclusive and sustainable development in IBRD member countries.”
Citi’s Head of SSA DCM, Ebba Wexler said, “The quality of the orderbook, with a strong central bank component, is true evidence of the World Bank’s credit appeal among GBP investors. This is further attested by the deal upsize from the original GBP 500 million to GBP 700 million.”
Morgan Stanley’s Ben Adubi, Head of SSA, emphasised the World Bank’s role in global development, stating, “Today’s transaction highlights the support the World Bank continues to receive from investors who remain strong supporters of its goal of ending extreme poverty and promoting shared prosperity.”
NatWest Markets’ Damien Carde said, “Having printed the last 10-year sterling SSA transaction in February 2020 at UKT+36 bps, the World Bank has successfully executed a new 10-year transaction today at UKT+11.3 bps. This signifies the tightest gilt spread across the SSA sector since January 2006, whilst the 60% central bank allocation reflects the World Bank’s unique ability to capture demand in difficult maturity points. This issuance reflects our wider commitment and focus on supporting sustainable development, and we are proud to have been involved at NatWest.”