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World Bank Raises USD 6 billion in a Dual-Tranche Transaction that Offers Investors  

 2-Year and 7-Year USD Benchmarks

Washington, DC, October 24, 2013 – The World Bank (IBRD, Aaa/AAA) priced today a record setting dual-tranche transaction raising a total of USD 6 billion matching its largest ever funded amount in a single day and the largest Multilateral Development Bank's USD deal since the World Bank’s previous record setter. The transaction -- comprised of 2-year and 7-year tranches -- was significantly over-subscribed with initial orders approaching USD 10 billion, setting another record for the World Bank. The total USD 6 billion raised was equally divided between the two maturity tranches, with the amount upsized from the initial targets. This transaction is the World Bank’s first USD benchmark offering of its 2014 fiscal year. The joint-lead managers for this global bond are Barclays, Daiwa Capital Markets, Deutsche Bank and Morgan Stanley.

The 2-year USD benchmark carries a semi-annual coupon of 0.375% and matures on November 16, 2015. It offers investors a yield of 0.377%, which is equivalent to a spread of 7 basis points over the 0.250% U.S. Treasury note due September 2015.

The 7-year USD benchmark carries a semi-annual coupon of 2.125% and matures on November 1, 2020. It offers investors a yield of 2.164%, which is equivalent to a spread of 27 basis points over the 2.000% U.S. Treasury note due September 2020.

“This was a record issuance amount for the World Bank. The exceptionally strong orders demonstrate the strength of our global franchise and the fact that investors welcome the safety of the World Bank in these volatile market conditions. The dual-tranche approach served us well again, allowing us to raise a large amount to fund our development programs, offer our core investor base the 2-year maturity which is in very strong demand, deepen our presence in the longer end of the yield curve with the 7-year tranche, and attract new investors to the World Bank", said Madelyn Antoncic, Vice President and Treasurer of the World Bank.

The present transaction is 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 3 billion 2-year Global Bond:
By Geography By Investor Type
Americas
29%
Central Banks / Official Institutions
92%
Asia
32%
Asset Managers
6%
Europe
15%
Banks / Corporates
2%
Middle East and Africa
24%
        
       
Investor Distribution of the USD 3 billion 7-year Global Bond:
By Geography By Investor Type
Americas
12%
Central Banks / Official Institutions
80%
Asia
66%
Asset Managers
8%
Europe and Middle East
22%
Banks / Corporates
10%
    
Insurance / Pension Funds
2%


Transaction Summary:

Issuer:
World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating:
Aaa/AAA
Tranche:
2-year
7-year
Amount:
USD 3 billion
USD 3 billion
Settlement date:
1 November 2013
1 November 2013
Coupon:
0.375%
2.125%
Coupon payment dates:
16 May and 16 November
(semi-annual, short first)
1 May and 1November (semi-annual)
Maturity date:
16 November 2015
1 November 2020
Issue price:
99.996%
99.748%
Issue yield:
 0.377%
2.164%
ISIN:
US459058DG57
US459058DH31
Listing:
Luxembourg Stock Exchange
Clearing system:
Fedwire, Euroclear, Clearstream
Joint lead managers:
Barclays, Daiwa Capital Markets, Deutsche Bank, Morgan Stanley
Senior Co-lead managers:
Citi, Credit Suisse, FTN, Jefferies, TD
Co-lead managers:
BMO, BNP Paribas, BoA, Castle Oak, Goldman Sachs, HSBC, J.P. Morgan, Nomura, RBC, SEB



Joint lead manager quotes:

“Given the Bank's long history in executing major strategic benchmarks, I suppose we should not be surprised that another remarkable transaction has been completed. The orderbook is a who's who of relevant global investors which enabled the bookrunners to tighten pricing twice during the process with no erosion of the book. Meticulous planning and appreciation of the prevailing market dynamics are the hallmarks of the World Bank Treasury Team, who have extracted the best possible value for all stakeholders in the IBRD family and the clients that are served. As always, it was a privilege for the chosen bookrunners to be involved”, said Charlie Berman, Chairman of Debt Capital Markets, at Barclays.

"We are delighted to have worked with such a prestigious borrower, the World Bank, on this highly successful transaction. The size of the book and quality of the orders are true testament to the extraordinary following the World Bank enjoys with the major global investor base. The deal was designed to accommodate investor demand both in the short end of the curve as well as the sometimes more challenging 7-year tenor, and this approach proved a great success, enabling good size and tighter than originally anticipated pricing in both tranches. A great achievement and one to be applauded on all counts”, said Christopher Brown, Head of Fixed Income at Daiwa Capital Markets.

"The IBRD has yet again leveraged its prominent position as a rare issuer in the Global Dollar space to access international capital flows, achieving the tightest spread for a 2-year SSA benchmark vs Treasuries since the financial crises, while also achieving the tightest pricing vs Treasuries for a 7-year SSA offering since March 2012. We understand the dual tranche structure has delivered the largest ever order book for a World Bank offering, attracting demand over USD 9 bn from nearly 150 orders across both lines. This confirms the World Bank's unique position in the international capital markets. We are particularly impressed by the World Bank timing the issue to tap global investors seeking AAA security amidst a period of uncertainty in the macro economic environment. Pricing a larger than expected dual tranche offering provides great confidence to all that the markets remain liquid and accessible for even the most expensive borrowers. We congratulate the World Bank on another stunning success in the international markets", said Miles Millard, Global Head of Capital Markets and Treasury Solution at Deutsche Bank.

“By opting for a 2-tranche strategy, the World Bank has successfully satisfied demand from two very different, yet equally high quality, investor bases. The choice of 2- and 7-year maturities also differed from recent supply from IBRD’s peers, which has tended to focus on the 3-, 5- and 10-year sectors. The World Bank has once again achieved the dual purpose of its benchmark offerings, by not only capturing attractive funding for IBRD but also establishing liquid reference points for its member countries. We congratulate the World Bank on this successful deal and were thrilled to be a part of it”, said Claus Skrumsager, Co-Head of European Capital Markets at Morgan Stanley.



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. 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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