Sign in Subscribe
Banking industry

World Bank Raises $4 Billion in Sustainable Development Bonds

Strategic Insights

— 2 min read

The World Bank has successfully priced two Sustainable Development Bonds, attracting over 225 orders totaling more than $11.5 billion from investors seeking high credit quality alongside sustainable investment. The dual tranche format, with both shorter and longer points on the yield curve, drew a globally diverse and broad base of fixed income investors, including central banks, official institutions, pension funds, insurance companies, and asset managers. The bonds will support the World Bank's mission to tackle poverty and boost shared prosperity through essential social services and dedicated financing to protect vulnerable populations.

Key Takeaways:

  • The World Bank raised a total of $4 billion from two Sustainable Development Bonds, a $1 billion 2-year bond maturing in March 2024 and a $3 billion 10-year bond maturing in March 2032.
  • The transactions attracted over 225 orders totaling more than $11.5 billion, appealing to investors seeking high credit quality alongside sustainable investment.
  • The dual tranche format drew a globally diverse and broad base of fixed income investors, including central banks, official institutions, pension funds, insurance companies, and asset managers.
  • The 2-year tranche priced at a spread versus the reference US Treasury of +10.7 basis points, resulting in a semi-annual yield of 2.290%, while the 10-year tranche priced at a spread versus the reference US Treasury of +23.6 basis points, resulting in a semi-annual yield of 2.597%.
  • Investor breakdown by type showed that 54% of investors in both tranches were central banks/official institutions, while 24% were asset managers/insurance/pension funds.
  • Investor breakdown by geography showed that 39% of investors in the 2-year tranche were from Asia, while 52% were from EMEA.
  • The strong and diverse nature of investor demand across both tranches is testament to the World Bank's top-tier credit quality and support for its sustainable and inclusive development efforts.
  • The dual tranche approach allowed for greater investor diversification and the outcome was impressive, demonstrating the World Bank's standing in the fixed income market, even in volatile times.

Statistics:

  • The World Bank raised a total of $4 billion from two Sustainable Development Bonds.
  • The transactions attracted over 225 orders totaling more than $11.5 billion.
  • 54% of investors in both tranches were central banks/official institutions.
  • 24% of investors in both tranches were asset managers/insurance/pension funds.
  • 39% of investors in the 2-year tranche were from Asia, while 52% were from EMEA.
  • The 2-year tranche priced at a spread versus the reference US Treasury of +10.7 basis points, resulting in a semi-annual yield of 2.290%.
  • The 10-year tranche priced at a spread versus the reference US Treasury of +23.6 basis points, resulting in a semi-annual yield of 2.597%.

Sources:

  • The World Bank
  • BofA Securities
  • Deutsche Bank
  • Goldman Sachs International
  • J.P. Morgan
  • Al Bawaba (Albawaba.com)
  • SyndiGate Media Inc. (Syndigate.info)

Read more