Dive Brief:
- The International Bank for Reconstruction and Development, a subsidiary of the World Bank Group, announced Tuesday it had raised $6.5 billion for a pair of sustainable development bonds — a transaction the international organization called its “largest order book to date.”
- The dual-tranche transaction includes a $3 billion 2-year bond which matures in August 2026 and a $3.5 billion 10-year bond which matures in August 2034, which are expected to deliver semi-annual yields of 4.06% and 3.95% respectively, per the World Bank.
- The transactions attracted capital from a diverse investor group, including bank treasuries, central banks and asset managers. The bond issues were jointly managed by Barclays, BMO Capital Markets, Citigroup Global Markets and HSBC. Both bonds will be listed on the Luxembourg Stock Exchange, according to a press release.
Dive Insight:
The sustainable development bonds support the World Bank’s goal of helping developing countries combat poverty by boosting their economies as they navigate multiple crises.
The organization’s IBRD arm, in particular, is recognized as the world’s largest development bank and provides middle-income and creditworthy low-income countries with loans, guarantees, advisory services and risk management products and aims to help these countries reduce poverty, per its website. The IBRD also helps organize responses to regional and global challenges.
“The overwhelming interest for bonds in both maturities with a record-breaking order book for a World Bank transaction underscores the demand for safe and liquid investments combined with the opportunity to foster sustainable development in World Bank member countries,” World Bank Vice President and Treasurer Jorge Familiar said in the release.
The organization said its dual transactions pulled in over 300 orders which amounted to over $22 billion and allowed for a broad range of global bond investors to take part in and accommodate both short- and long-maturity investment strategies.
The transaction came just a week after IBRD priced a 9-year bond at $225 million with investor returns tied to the generation of carbon removal credits from reforestation projects based in Brazil’s Amazon rainforest. Earlier this year, the World Bank’s reconstruction and development subsidiary issued a $5 billion sustainable development bond maturing in January 2031.
The World Bank said it issued $43 billion worth of bonds in 20 currencies and completed 196 transactions to support the financing of sustainable development projects and programs in its 2023 fiscal year.
