The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) on 12 March priced a USD$4.5 billion five-year global benchmark. This is the IBRD’s first issuance this year, and its largest 5yr USD global benchmark since 2016.
Book orders were in excess of USD$6.6 billion in the oversubscribed offer with over 120 orders from a total of 31 investor countries represented by central banks and official institutions. Other investors included banks treasuries, corporates, asset managers, as well as pension and insurance funds. Joint lead managers for this global bond are BNP Paribas, Citi, J.P. Morgan, and Wells Fargo.
The bond will pay a semi-annual coupon of 2.5% annually and a maturity date of March 19, 2024. It offers investors a yield of 2.535%, equivalent to 12.75 basis points (bps) spreads above the 2.375% US treasuries due February 29, 2024.
Since issuing its first bond denominated in USD over 70 years ago, the World Bank (IBRD) has developed a lasting partnership with investors in the U.S. and around the world. We are pleased to price our first USD benchmark issue this year with a high-quality order book and diverse investor allocation. We thank our investors for providing such a warm reception to our transaction and sincerely appreciate their support for our development mandate
“It’s been almost six months since the last World Bank USD global benchmark, but it was well worth the wait. As we have almost come to expect from the World Bank, the trade was another huge success printing at the tightest level for a five-year level of the year with a typically diversified order book of the highest quality,” said Jamie Stirling, Head of SSA DCM, BNP Paribas.
“IBRD delivers another spectacular result in the USD market with its first benchmark of 2019. With over 120 investors and more than USD$6.6 billion of orders, IBRD has achieved its tightest spread to Treasuries for a five-year benchmark that I can remember. Many congratulations on an outstanding transaction,” said Alex Barnes, Head of SSA Syndicate, Citi.
“The World Bank was swift to take advantage of the recent favorable turn in funding spreads which coincides with a clear issuance window to come with a USD$4.5 billion USD Global, its first USD benchmark funding exercise of the calendar year. Amid historically low USD supply volumes, IBRD’s premium credit quality attracted a wide constellation of investor demand, especially from the global central banks and official institutions community. At UST +12.75 bps, the deal marks the tightest spread to U.S. Treasuries achieved by a supranational issuer year-to-date.” said Keith Price, Managing Director, Head of SSA DCM & Syndicate, J.P. Morgan.
“It’s a privilege to work with such a prestigious borrower on its first USD Global Benchmark of the calendar year. The World Bank once again proves how wide and deep its investor base is with this tightly priced and heavily oversubscribed transaction. Furthermore, at MS + 6, this issue becomes the tightest price five-year SSA transaction this year, a huge achievement to the World Bank team!” said Carlos Perezgrovas, Head of SSA origination at Wells Fargo.
The World Bank issues approximately USD$50 billion annually in bonds for sustainable development. These range from structured notes that highlight the Sustainable Development Goals to benchmark-sized issuance’s that cover a variety of impact themes including climate, education, gender, health, social services and clean water and sanitation. A key priority for the World Bank’s engagement in the capital markets is to build strategic partnerships with investors and other market participants to raise awareness for development challenges and accelerate opportunities to mobilize finance for development.
