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World Bank Raises USD 4.25 billion in a Dual-Tranche Transaction that Offers Investors Long 2-Year and 7-Year USD Benchmarks

Washington, DC, June 18, 2014 – The World Bank (IBRD, Aaa/AAA) priced today a dual-tranche transaction raising a total of USD 4.25 billion in its final benchmark offering of its 2014 fiscal year. The transaction -- comprised of a long 2-year bond and a 7-year bond -- was significantly over-subscribed with final orders over USD 5 billion. Of the total USD 4.25 billion raised, USD 2.25 billion was allocated to the long 2-year bond and USD 2 billion to the 7 year bond, with the amount upsized from the initial targets. The joint-lead managers for these global bonds are Barclays, J.P. Morgan, Morgan Stanley and Nomura.

The long 2-year USD benchmark carries a semi-annual coupon of 0.625% and matures on October 14, 2016. It offers investors a yield of 0.690%, which is equivalent to a spread of 22.6 basis points over the 0.375% U.S. Treasury note due May 2016.

The 7-year USD benchmark carries a semi-annual coupon of 2.250% and matures on June 24, 2021. It offers investors a yield of 2.345%, which is equivalent to a spread of 12.55 basis points over the 2.000% U.S. Treasury note due May 2021.

“These transactions end our benchmark funding for the fiscal year on a high note. The dual tranche approach was again very well received by investors and we more than doubled the targeted transaction size due to the high demand. The World Bank has had a very successful year in the capital markets with today’s transaction bringing the total raised through benchmarks to over USD 31.3 billion, representing a share of nearly 65% of our total funding thus far for the fiscal year. We are very grateful for the support that we have had from our investors and bank partners both in today’s transaction and throughout the year”, said Doris Herrera-Pol, Director and Global Head of Capital Markets, World Bank Treasury.

The present transactions are consistent with the World Bank’s longstanding practice of deploying its franchise as an issuer in the international capital markets to offer investors high-quality, liquid instruments. This approach has direct benefits for World Bank member countries as well, since as a cooperative institution it is able to fund its activities as a provider of financial services to its members on highly attractive terms.


Investor Distribution of the USD 2.25 billion 2-year Global Bond:
By Geography By Investor Type
Americas
37%
Central Banks / Official Institutions
62%
Asia
29%
Banks / Bank Treasuries / Corporates
22%
Europe
26%
Asset Managers / Pension / Insurance
16%
Middle East and Africa
8%
        
       
Investor Distribution of the USD 2 billion 7-year Global Bond:
By Geography By Investor Type
Europe
64%
Banks / Bank Treasuries / Corporates
47%
Americas
18%
Central Banks / Official Institutions
30%
Asia
16%
Asset Managers / Pension / Insurance
23%
Middle East and Africa
    2%  


Transaction Summary:

Issuer:
World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating:
Aaa/AAA
Tranche:
2-year
7-year
Amount:
USD 2.25 billion
USD 2 billion
Settlement date:

25 June 2014

25 June 2014

Coupon:

0.625%

2.250%

Coupon payment dates:

14 October and 14 April
(semi-annual, short first)

24 June and 24 December
(semi-annual, short first)

Maturity date:

14 October 2016

24 June 2021

Issue price:

99.852%

99.390%

Issue yield:

0.690%

2.345%

ISIN:

US459058DS95

US459058DT78

Listing:
Luxembourg Stock Exchange
Clearing system:
Fedwire, Euroclear, Clearstream
Joint lead managers:
Barclays, J.P. Morgan, Morgan Stanley, Nomura
Senior Co-lead managers:
BMO, DB, Castle Oak, TD
Co-lead managers:
BofAML, BNP, Citi, CS, Daiwa, HSBC, FTN, Incapital, GS, Jefferies, Scotia Capital, SEB, RBC, Tokai Tokyo, Wells Fargo



Joint lead manager quotes:

With a successful $4.25bn dual-tranche benchmark, the World Bank ends their current fiscal year on a high note and we were honoured to be a part of it.  Once again, World Bank were able to tailor their issuance to best meet two different but complimentary investor bases best highlighted by the strength, size and diverseness of both order books. The World Bank have been able to achieve a dual purpose of attractive pricing and creating new liquid benchmark reference points. With this transaction, World Bank has once again cemented their status as a first-in-class borrower and will start their 2014-2015 fiscal year on a strong foundation”, said Susan Barron, Managing Director, SSAR Origination at Barclays.

"Once again, the World Bank proves adept at navigating un-chartered territory, coming to market with its first 7-year benchmark of 2014, and only the second 2-year benchmark year-to-date. The issuer's deep and wide investor following, ensures that the World Bank has access to the USD benchmark market across the entire curve. The 7yr prints at the tightest ASW at this maturity for over a year, and the entire exercise is made even more cost efficient with a deeply sub-libor 2-year”, said John Lee-Tin, Managing Director, Head of Frequent Borrower Coverage at J.P. Morgan.

“Following World Bank’s successful dual tranche offering in October last year, they have repeated the strategy to great effect again. The two tranches here both received a strong level of investor interest, successfully capturing a broad breadth of demand. The fact that the two order books were so similar in size highlights how they managed to correctly read the market in both cases”, said Daniel Shane, Managing Director, Head of SSA Origination & Syndicate at Morgan Stanley.

"This was a very smart offering from the World Bank. Deploying the barbell strategy in long 2 year and 7 year maturities it was able to build a balanced book across the maturities and offer a very stable deal in a volatile backdrop. This is a fitting conclusion to its annual funding programme providing exceptional pricing at flat to its curve", said Nick Dent, Managing Director, Head of EMEA Syndicate at Nomura.



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 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 overriding goal is to achieve major, sustainable improvements in standards of living worldwide. Information on bonds for investors is available on the World Bank Treasury website: (www.worldbank.org/debtsecurities).

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