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World Bank Prices a New USD 5 Billion 5-Year Global Bond

Washington DC, May 17, 2016 - The World Bank (IBRD, Aaa/AAA) today priced a USD 5 billion 5-year global bond that matures on May 24, 2021. The transaction follows a successful USD 6 billion dual tranche benchmark that offered investors 2- and 7-year World Bank bonds in April and refreshes the 5-year part of the World Bank curve with a new liquid benchmark.

The order book closed in excess of USD 6.7 billion with over 105 accounts participating. Based on the high quality demand, the World Bank was able to tighten pricing from the initial guidance and successfully price a USD 5 billion global transaction.

Joint lead managers for this global bond are Bank of America, Barclays, Merrill Lynch, J.P. Morgan, and Nomura.

The 5-year transaction has a coupon of 1.375% per annum payable semi-annually and a maturity date of May 24, 2021. It offers investors a yield of 1.429% (semi-annual), equivalent to 17.3 basis points over the 1.375% US Treasury note due April 2021.

“I am extremely delighted with the impressive reception from investors around the world for another highly successful World Bank USD benchmark. The oversubscription, quality and breadth of the order book indicates the strong value investors place on the World Bank’s solid credit, and the liquidity and performance of its bonds. We deeply appreciate the continued support from our investors for the World Bank and its development mandate,” said Arunma Oteh, Vice President and Treasurer, World Bank.


Investor Distribution:

Distribution by Geography Distribution by Investor Type
Asia Pacific 48% Central Banks/Official Institutions 54%
Americas 36% Bank Treasuries/Private Banks/Corporates 33%
Europe 16% Asset Managers/Insurance/Pension Funds 13%


Transaction Summary:

Issuer: World Bank
(International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa /AAA
Maturity: 5-year
Amount: USD 5 billion
Settlement date: May 24 2016
Coupon: 1.375% per annum
Coupon payment dates: May 24 and November 24 in each year
Maturity date: May 24, 2021
Issue price: 99.740%
Issue yield: 1.429% (s.a)
Listing: Luxembourg Stock Exchange
Clearing systems: Fedwire, Euroclear, Clearstream

ISIN: US459058FH13
Joint lead managers: Bank of America Merrill Lynch, Barclays, J.P. Morgan, and Nomura
Senior-co-lead managers: Bank of Montreal, Deutsche Bank, Wells Fargo
Co-lead managers: BNP Paribas, Citi, Credit Agricole, First Tennessee National, Goldman Sachs, HSBC, Mesirow, Mitsubishi, Mizuho Securities, Morgan Stanley, RBC Capital Markets, Scotiabank, TD Securities


Joint lead manager quotes:

“What a great trade. The first 5-year Sovereign/Supranational/Agency (SSA) in over two months. But more significantly, the tightest print to US Treasuries in any tenor for an SSA this year whilst printing the USD 5 billion. The World Bank team works hard with investors and watches the market closely, and they’ve really been rewarded here,” said Adrien de Naurois, Managing Director, SSA syndicate at Bank of America Merrill Lynch.

“The World Bank team has delivered yet another successful transaction with its new USD 5 billion 5-year deal. The strong demand, as highlighted by the USD 6.7 billion plus order book, is a clear testament to the faith placed by investors in IBRD’s credit quality and status as the benchmark for market liquidity. This is World Bank’s largest 5-year transaction since 2012 and the largest for the whole sector in 2016 year-to-date, all achieved with a very fair, but cost efficient new issue premium,” said Lee Cumbes, Managing Director, Head of Public Sector EMEA, Barclays.

“With this jumbo benchmark, the World Bank re-opens the 5-year sector in style after almost a two month hiatus of supply in the belly of the curve from SSA issuers. In addition to the impressive breadth and quality of investors, the deal achieves an improvement in pricing versus the previous 5-year, as well as the tightest spread versus US Treasury note of any deal this year, a reflection of the high regard that investors hold for this type of credit,” said John Lee-Tin, Managing Director, Head of SSA DCM & MTN, J.P. Morgan.

“World Bank’s USD benchmark offering once again demonstrates the global appeal of its credit.  A USD 5 billion 5-year trade, based off an order book in excess of USD 6.7 billion with over 100 accounts is a rare occurrence in the SSA space – and even more impressive given the absence of a new issue concession,” said Spencer Dove, Managing Director, DCM Public Sector, Nomura.

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 investor’s 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.

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 189 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 Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. The World Bank has been issuing bonds in the international capital markets for over 60 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.


 

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