The World Bank (International Bank for Reconstruction and Development, IBRD) has raised $2.7 billion by pricing two Sustainable Development Bonds. The transaction involved a $2 billion 3-year bond linked to the Secured Overnight Financing Rate (SOFR) index, maturing in June 2027 and a $700 million tap of an existing 7-year bond maturing in February 2031. The bonds will settle on 24th July 2024.
The dual-tranche attracted over 110 orders, with an order book reaching nearly $4.7 billion. The 3-year bond pays a coupon of Compounded SOFR +27 basis points, while the existing 7-year bond pays Compounded SOFR +37 basis points.
The bonds will be listed on the Luxembourg Stock Exchange. The lead managers for the transaction are HSBC Bank Plc., The Bank of Nova Scotia, and Wells Fargo Securities, LLC.
Jorge Familiar, Vice President and Treasurer, World Bank said, “As the size of the order book demonstrates, investors recognise our commitment to the SOFR market and very much welcome an opportunity to participate across different points on the yield curve.”
The 3-year bond has an issue price of 100%, and the 7-year bond has an issue price of 99.561%. Coupon payments for the 3-year bond are due quarterly on the 15th of March, June, September, and December each year while those for the 7-year bond are on the 11th of February, May, August, and November, every year.
Investor interest varied by type and geography. For the 3-year bond, 62% of orders came from banks, 20% from asset managers, and 18% from central banks. For the 7-year bond, 97% of orders were from banks, 2% from asset managers, and 1% from central banks. Geographically, the 3-year bond saw 56% of orders from Europe, 41% from the Americas, and 3% from Asia. The 7-year bond had 71% of orders from Europe, 21% from the Americas, and 8% from Asia.