World Bank Extends Australian Dollar Yield Curve with New 10-year Benchmark
Washington DC , September 21, 2010 – The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) today priced a new 10-year benchmark Australian dollar transaction.
The AUD 700 million 10-year fixed rate notes are due on October 1, 2020 and have a semi-annual coupon of 5.75%, a semi-annual yield of 5.795%, and a reoffer price of 99.662%. This equates to a spread of 66.75 basis points over the ACGB 4.5% due April 2020. Settlement date is October 1, 2010.
The joint lead-managers for the transaction are Commonwealth Bank of Australia, RBC Capital Markets and Westpac Institutional Bank and the co-managers are Deutsche Bank, TD Securities and UBS Investment Bank.
The notes were distributed to a broad range of institutional investors in Australia 73%, Asia 20% (including Japan), North America 4% and Europe 3%. Investors remain attracted by the rarity of the issuer in this market, the global recognition of the name, the strength of the credit, and the liquidity afforded to investors by a new point in the World Bank AUD yield curve.
“Since our debut in the Australian dollar benchmark market in 1999, we have pursued a demand-driven strategy that relies on feedback from investors to choose the maturity and other terms and features of our bonds. On this occasion, many investors had an interest in long maturities, and this allowed us to extend the World Bank's yield curve in this market to 2020. We are grateful for the positive feedback and support we received from investors and our partners," said Doris Herrera-Pol, Director and Global Head of Capital Markets at the World Bank.
“This is a very successful return to the Australian market for the World Bank. The new 10 year line was very well received with take-up from a broad spectrum of global investors in Australian dollar product. Commonwealth Bank of Australia is pleased to have worked with IBRD on this benchmark offering," said Paul O’Brien, Head of Syndicate at CBA.
"The Kangaroo market has continued to go from strength to strength and the World Bank remains an important issuer in its ongoing development. Since its first transaction launched in 1999, the World Bank has issued over A$6.5 billion across 6 different maturities. Whilst not as frequent as other SSA issuers, the World Bank’s active participation confirms this market as an all around strategic funding option for the ultra high grade SSA sector,” said Enrico Massi, Managing Director, Head of Debt Capital Markets - Asia Pacific at RBC Capital Markets.
“It’s good to see the World Bank return to the market and extend their curve with a new 10-year offering. This deal helps the issuer maintain its premier image in the Kangaroo market with what will be viewed as another strong strategic deal. Westpac is pleased to have worked with the World Bank again,” said Mark Goddard, Executive Director, Head of Syndicate at Westpac Institutional Bank.
About the World Bank
The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 187 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 overriding goal is to achieve major, sustainable improvements in standards of living worldwide. It has been issuing bonds in the international capital markets for over 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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