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Third World Bank Green Bond Issue Raises USD 130 Million from Institutional Investors
Stockholm, December 3, 2009 –
The World Bank (International Bank for Reconstruction and Development, rated Aaa/AAA) announced today that its third green bond issue successfully raised USD 130 million. World Bank green bonds support projects in client countries that meet specific criteria for low-carbon development. These bonds are an example of public and private-sector efforts to raise funds for projects seeking to mitigate the rise in greenhouse gas emissions or help people in developing countries affected by climate change.
The transaction was lead managed by SEB. Among the investors who purchased the bonds were institutions in the US such as the California State Teachers’ Retirement System (CalSTRS), and in Sweden, the Swedish life insurance provider SEB Trygg Liv, and Swedish National Pension Funds - AP2 and AP3. The United Nations Joint Staff Pension Fund (UNJSPF), which had participated in the inaugural World Bank green bond last year, also invested in the latest World Bank green bond.
"For us as long-term investors, it is important to find responsible investments targeted at the global climate challenges. The green projects supported by the World Bank green bond are an important step in that direction", says Christina Kusoffsky Hillesöy Head of Communication and Sustainable Investments at AP3 (Third Swedish National Pension Fund).
The World Bank issued its first green bonds in November 2008 for an amount of SEK 2,325 million. That issue marked the first time the World Bank had offered bonds to raise funds identified to a specific World Bank program. Since then the SEK issue has been increased twice with new investors participating. The World Bank launched its second green bond issue in April 2009, placing USD 300 million with the State of California Treasurer’s office.
This third green bond transaction brings the total amount raised through World Bank green bonds to an equivalent of almost USD 800 million.
Warren Evans, Director of the Environment Department at the World Bank, said “Climate action in developing countries – specifically, mitigation and adaptation initiatives – will require important financing by the international community, from both public and private sources. We’re pleased to see continued investor support to what the World Bank is carrying out in conjunction with our country partners; it’s an indication that investors fully understand the inextricable link between development and climate change. Helping one clearly helps the other.”
“The amounts involved in the negotiations on official climate financing are very small compared to the investment needs in emerging markets. Consequently, private financial flows must play the lead role. But for that to happen, investments must be profitable. The World Bank green bond provides a good investment and a safe return, while offering investors the opportunity to actually help combat climate change,” said Klas Eklund, Senior Economist, SEB.
Amount: USD *130,000,000
Settlement Date: December 4, 2009
Maturity date: December 4, 2013
Issue price: 100.114%
Redemption Amount: 100%
Coupon: 2% per annum
Denomination: USD 1,000
Clearing systems: Euroclear, Clearstream, DTC
Lead Manager: Skandinaviska Enskilda Banken AB (publ) ("SEB")
Co-lead manager: Credit Suisse Securities (Europe) Limited
*On December 15, 2009, the World Bank agreed to increase the nominal amount of the notes with a second tranche for an amount of USD 50 million with an issue price of 99.16% (settlement date: December 22, 2009). The new total outstanding principal amount is USD 180 million.
For more information on SEB and the World Bank Green Bonds, please visit http://www.sebgroup.com and http://treasury.worldbank.org/cmd/htm/WorldBankGreenBonds.html.
This press release is not an offer for sale of Notes of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as “World Bank”. Any offering of the Notes will be made only by means of a prospectus containing detailed information that will made available through SEB, the lead manager of the notes, and Credit Suisse AG, the co-lead manager of the notes, and is subject to restrictions under the laws of several countries. Securities may not be offered or sold except in compliance with all such laws.
SEB is a Northern European financial group serving some 400,000 corporate customers and institutions and five million private individuals. SEB offers universal banking services in Sweden, Germany and the three Baltic countries - Estonia, Latvia and Lithuania. It also has a local presence in the other Nordic countries, Ukraine and Russia and a global presence through its international network in leading financial centres. On September 30, 2009, the Group’s total assets amounted to SEK 2,233 billion and its assets under management totalled SEK 1,295 billion. The SEB Group has about 20,000 employees. Read more about SEB at: www.sebgroup.com.
The World Bank is a global development cooperative owned by its member countries. Its purpose is to help its members achieve equitable and sustainable economic growth in their economies and to find solutions to regional and global problems in economic development and environmental sustainability, all with a view to reducing poverty and improving standards of living. The International Bank for Reconstruction and Development (IBRD), rated Aaa/AAA (Moody’s/S&P) is owned by 186 countries. It is the oldest and largest entity in the World Bank Group and provides its members with financing, risk management products, and other financing services, as well as specialized expertise and strategic and convening services requested by its member countries. To fund this activity, IBRD has been issuing World Bank bonds in the international capital markets for 60 years. The World Bank is one of the most recognized and innovative borrowers in the international capital markets. More information about the World Bank and its activities in the capital markets is available on the web at: www.worldbank.org/debtsecurities.
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