The World Bank has announced the successful pricing of two Sustainable Development Bonds, raising a total of USD 9 billion through a 3-year bond and a 7-year bond. The effort marked the bank's largest one-day capital raise in USD benchmark bonds and attracted over 300 orders totaling more than USD 22.5 billion. The bonds will be listed on the Luxembourg Stock Exchange.
The dual-tranche transaction consisted of a USD 4 billion bond maturing in May 2028, and a USD 5 billion bond maturing in May 2032. Managing the process were Citi, HSBC Bank plc, Morgan Stanley, and National Bank of Canada Financial Markets.
Jorge Familiar, Vice President and Treasurer of the World Bank, stated, “This record-breaking transaction once again shows the tremendous support the World Bank has from the global investor community.”
The 3-year bond had a yield of 3.704% with a margin of +6.8 basis points above the US Treasury, while the 7-year bond had a yield of 4.071% with a margin of +11.2 basis points. The world market investors' interest amounted to USD 12.3 billion for the 3-year bond alone, demonstrating the World Bank’s substantial market presence.
The composition of investors was diverse for both tranches. For the 3-year bond, 51% were from banks and corporates, 36% from central banks and official institutions, and 13% from asset managers, insurance, and pension funds. For the 7-year bond, the figures stood at 39%, 38%, and 23%, respectively. Geographically, Europe's Middle East and Africa region dominated both tranches, followed by the Americas and Asia.
Leaders from managing banks expressed satisfaction with the results. Ebba Wexler from Citi remarked on the robust support amid market volatility. Asif Sherani, from HSBC, highlighted the transaction as the largest ever USD outing for a supranational. Ben Adubi from Morgan Stanley lauded the deal amidst market challenges and Scott Graham from National Bank of Canada Financial Markets appreciated the high demand for the bonds.
The bonds contribute to the World Bank's long-standing effort to finance impactful developmental projects worldwide, aligning with Sustainability Bond Guidelines by the International Capital Market Association. Further details are available through the World Bank's Treasury office and their online resources.