NEWS Release - World Bank Raises USD 4 Billion through a 3-Year Global Benchmark Bond to Support Global Development Priorities
Washington, DC, March 14, 2017 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today issued a USD-denominated global benchmark bond that raised USD 4 billion from investors in the Americas, Asia, Europe, and Middle East and Africa. Proceeds of the bond will support the World Bank’s development activities around the world.
The 3-year bond transaction responds to investor demand for high quality assets at a time of increasing focus on the underlying rate environment in the US and greater global economic and political uncertainty. There were orders for over USD 5.6 billion from 88 investors representing central banks and official institutions (44%), bank treasuries and corporates (29%), and asset managers, insurance and pension funds (27%). Joint lead managers for this global bond are BNP Paribas, Deutsche Bank, Morgan Stanley, and RBC Capital Markets.
The 3-year benchmark has a semi-annual coupon of 1.875% per annum and a maturity date of April 21, 2020. It offers investors a yield of 1.904%, equivalent to 23.05 basis points over the 1.625% UST due March 15, 2020.
"This was an outstanding transaction. As with our previous bonds, it anchors our annual funding program and is instrumental to achieving our twin goals of eradicating extreme poverty and boosting shared prosperity. Its success not only reflects our track record as a premier issuer in the global capital markets, but also underscores the importance that investors accord to economic development. We value the strong commitment of our partners and bond investors who continue to see our transactions as opportunities to facilitate the financing of the Sustainable Development Goals," said Arunma Oteh, Vice President and Treasurer, World Bank.
Joint lead manager quotes
“Another excellent outcome for the World Bank raising size at the tightest level for any SSA yet in 2017. With just over 25% placed into the US, also more evidence of the continued broadening of investor diversification that their funding strategy generates,” said Jamie Stirling, Global Head of SSA DCM, BNP Paribas.
“By tapping into the strong demand at the front end of the SSA curve with a new 3-year global, priced at the tightest spread to mid-swaps so far for a supranational this year, the World Bank has once again picked the optimal maturity in response to a more uncertain environment. The fact that so many different investors have flocked to the World Bank is a testament of the issuer’s appeal as a liquid quality asset. We congratulate the World Bank on this fantastic result,” said Steven Jallport, Head of SSA Origination, Deutsche Bank.
“The World Bank has returned to the market with a textbook transaction, and continued to set new records and show its leadership, by pricing this new 3-year transaction at levels versus swaps that we have not seen in the benchmark USD SSA marketplace since the World Bank's own long 2-year transaction from June 2015. Given the volatility in swap spreads, it needed a flagship issuer like the World Bank to reinvigorate the USD SSA market, and re-establish new market standards. The size of this deal demonstrated the World Bank’s continued appeal to investors across the globe, as well as its ability to dynamically and proactively respond to market conditions and investor feedback. The success of this issuance further underscores the World Bank’s continued pre-eminent status in the SSA universe,” said Navindu Katugampola, Head of SSA Origination, Morgan Stanley.
page source http://treasury.worldbank.org/
