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World Bank Returns to Kangaroo Market with New Dual-Tranche Australian Dollar Benchmark Offering

Sydney, June 17, 2014 – The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) today priced a dual-tranche Australian dollar (AUD) transaction, offering investors an increase of the World Bank’s benchmark AUD 500 million 3.75% Notes due January 23, 2019, and a new 11-year fixed rate offering.

The 2025 offering is the World Bank’s longest dated benchmark transaction in Australian dollars to date and also the longest benchmark in the primary market offered by a Sovereign/Supranational/Agency (SSA). At an amount of AUD 1.3 billion for both tranches, this is the largest aggregate size issued at one time by an SSA issuer in this market in 2014.

The AUD 1 billion increase of the World Bank’s 3.75% Notes due January 23, 2019 brings the total amount outstanding on this line to AUD 1.5 billion. The increase has an issue price of 101.513% (plus accrued interest of 1.575%) to yield 3.39%. This equates to a spread of 31.5 basis points over the 5.25% Australian Commonwealth Government Benchmark (ACGB) due March 2019.

*The World Bank’s new AUD 300 million long-dated benchmark has a coupon of 4.25% and matures on June 24, 2025. This was issued at 99.306% to yield 4.33% at a spread of 55.5 basis points over the 3.25% ACGB due April 2025.

Both transactions settle on June 24, 2014.

The joint lead managers for this dual-tranche offering are Nomura, RBC Capital Markets and TD Securities.

The benchmark bonds were launched with an initial target aggregate size of AUD 600 million, but demand grew quickly to allow for a total size of AUD 1.3 billion for both tranches.

“This dual-tranche offering provides investors with a choice of maturities for their investments and increases the liquidity of the World Bank’s existing AUD 2019 line.  We would like to thank all investors who supported this trade and the banks we partnered with for the offering. It is another very successful transaction for the World Bank, but this would not be possible without the continued support that we receive from so many investors in Australia and globally,” said Andrea Dore, Lead Financial Officer, Capital Markets, World Bank.

The bonds were distributed globally and placed with institutional investors in Australia, Asia, Japan, and Europe. The investor mix included central banks/other official institutions, asset managers and banks/corporates.

Transaction Summary:

Issuer:
World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating:
Aaa/AAA
Tranche:
5-year
11-year
Amount:
AUD 1 billion
AUD 300 million
Settlement date:
June 24, 2014
June 24, 2014
Coupon:
3.75% (payable semi-annually)
4.25% (payable semi-annually)
Maturity date:
January 23, 2019
June 25, 2025
Issue price:
101.513%
99.306%
Issue yield:
3.39%
4.33%
ISIN:
AU3CB0217982
AU3CB0222040
Listing:
Luxembourg Stock Exchange
Clearing system:
Austraclear, Euroclear, Clearstream
Joint lead managers:
Nomura International plc, RBC Capital Markets, TD Securities

*On October 29, 2014, IBRD agreed to increase the principal amount with a second tranche in the amount of AUD 300 million with an issue price of TBD (settlement date: TBA). The new total outstanding principal amount is AUD 600 million.

Investor Distribution of the AUD 300 million 4.25% Increase:
By Geography By Investor Type
Asia
39%
Asset Managers
50%
Europe
34%
Insurance / Pension Funds
47%
Australia
27%
Banks / Corporates
3%



Joint lead manager quotes:

“The World Bank’s impeccable timing and successful use of a barbell strategy has enabled it to simultaneously provide liquidity to the most sought after maturities in the Kangaroo market. This represents the largest offering of the year and the World Bank has again led the way, issuing the market’s inaugural 11-year benchmark, which is likely to be the first of many new 2025 lines in the coming months,” said Mark Yeomans, Vice-President, Nomura International.

“Once again, the World Bank has raised the bar in the Australian capital markets by issuing a successful dual tranche offering, increasing outstandings and extending their curve.  Well thought out execution, timing and responsiveness has allowed the World Bank to further cement its position as the premier issuer in this market,” said Enrico Massi, Managing Director, Head of Debt Capital Markets, Asia-Pacific, RBC Capital Markets.

“The World Bank has been responsive to investor demand for its bonds in both Australian and New Zealand dollars. The World Bank is a prudent and very nimble issuer - when demand is there and costs make sense, they position themselves well to move quickly. TD Securities was extremely proud to be a part of this transaction,” said Ben Stewart, Director, Debt Syndicate, TD Securities.

The notes are issued under the laws of New South Wales and documented under the World Bank's Global Debt Issuance Facility. The notes will be listed on the Luxembourg Stock Exchange, will settle through Austraclear, Euroclear and Clearstream, and are expected to qualify as eligible collateral for repurchase agreements for the Reserve Bank of Australia’s open market operations.



About the World Bank

The World Bank (International Bank for Reconstruction and Development, IBRD), is an international organization created in 1944. It operates as a global development cooperative owned by 188 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank has two main goals: to end extreme poverty and promote shared prosperity. It seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines and by coordinating responses to regional and global challenges. It has been issuing bonds in the international capital markets for more than 60 years to fund its activities. Information on bonds for investors is available on the World Bank Treasury website: (www.worldbank.org/debtsecurities).

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