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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, April 12, 2016 - The World Bank (IBRD, Aaa / AAA) today priced a dual-tranche transaction raising a total of USD 6 billion through USD 5 billion 2-year and USD 1 billion 7-year global benchmark bonds. This is the World Bank’s largest USD benchmark transaction since its USD 5.25 billion dual-tranche transaction in September 2015.

This transaction refreshes the World Bank curve with new, liquid reference points for its current fiscal year in both 2-year and 7-year bonds. The joint-lead managers for this global bond are BNP Paribas, Goldman Sachs International, Morgan Stanley, and RBC Capital Markets.

The transaction was significantly oversubscribed with 165 total orders across both tranches, a total final order book of over USD 9 billion and strong official institution, bank treasury and fund manager participation.

The 2-year USD benchmark carries a semi-annual coupon of 0.875% and matures on July 19, 2018, which is equivalent to a spread of 23.23 basis points over the 0.875% US Treasury note due March, 31, 2018. The 7-year USD benchmark carries a semi-annual coupon of 1.75% and matures on April 19, 2023, which is equivalent to a spread of 22.77 basis points over the 1.50% US Treasury note due March 31, 2023.

“The oversubscribed order books for our second dual-tranche transaction this year indicate the World Bank’s solid credit and liquidity at a time when the financial landscape remains uncertain. We were not only able to offer our core investor base the 2-year maturity which is in very strong demand, but we were also able to deepen our presence in the longer end of the yield curve with the 7-year tranche rarely seen in the current market. We are extremely appreciative of the continued strong support we receive from investors and financial partners for our global sustainable development mandate,” said Arunma Oteh, Vice President and Treasurer at 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 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.


Investor Distribution of the USD 5 billion 2-year USD Benchmark:

Distribution by Geography Distribution by Investor Type
Asia 56% Central Banks / Official Institutions 72%
Americas 26% Bank Treasuries / Banks / Corporates 22%
Europe 14% Asset Managers / Pension Funds 6%
Middle East and Africa 4%    

Investor Distribution of the USD 1 billion 7-year USD Benchmark:

Distribution by Geography Distribution by Investor Type
Europe 42% Bank Treasuries / Banks / Corporates 44%
Asia 30% Central Banks / Official Institutions 37%
Americas 23% Asset Managers / Pension Funds 19%
Middle East and Africa 5%    


Transaction Summary:

Issuer:
World Bank
(International Bank for Reconstruction and Development, IBRD)
Issuer rating:
Aaa /AAA (Moody's / S&P)
Maturity:
2-year
7-year
Amount:
USD 5 billion
USD 1 billion
Settlement date:
April 19, 2016
April 19, 2016
Coupon:
0.875%
1.750%
Coupon payment dates:
January 19 and July 19 (short first coupon form April 19, 2016 to
July 19, 2016)
April 19 and October 19
Maturity date:
July 19, 2018
April 19, 2023
Issue price:
99.823%
99.987%
Issue yield:
0.955%
1.752%
ISIN:
US459058FE81
US459058FF56
Listing:
Luxembourg Stock Exchange
Clearing systems:
Fedwire, Euroclear, Clearstream

Joint lead managers:
BNP Paribas, Goldman Sachs International, Morgan Stanley, RBC Capital Markets
Senior Co-lead managers:
Deutsche Bank, Citi, Credit Agricole, Wells Fargo
Co-lead managers:
Natixis, BMO Capital Markets, Mizuho Securities, Castle Oak, J.P. Morgan, HSBC, Scotiabank, TD Securities, Barclays, Bank of America Merrill Lynch, Incapital, Nomura


Joint lead manager quotes:

“Yet another superb dual-tranche benchmark outing from the World Bank who ultimately priced both tranches flat to slightly inside their secondary curve, a feat not achieved in SSA-land in recent memory. With the 2-year achieving a final book of over USD 7 billion and the 7-year the first SSA deal in this maturity for 7 months, the World Bank illustrated the strength of their unwavering broad institutional investor support," said Jamie Stirling, Global Head of SSA DCM, BNP Paribas.

“We were delighted to be involved in this dual-tranche transaction for the World Bank. The World Bank has timed their latest benchmark offering to perfection and the supportive market conditions enabled them to issue the tightest SSA deal of the year to date. The 2-year tranche is also the first USD SSA deal to break the double digit spread threshold in 2016. With the addition of the 7-year tranche, the World Bank were able to satisfy the broad demand for their name from both official institutions and real money accounts,” said Lars Humble, Managing Director, Head of SSA Syndicate Goldman Sachs International.

“The USD SSA market looks to the World Bank as its standard-bearer, able to mobilize investors with transactions that capture their attentions and reprice the market. This dual tranche deal demonstrated the World Bank’s continued appeal to investors across the curve, as well as its ability to dynamically and proactively respond to market conditions and investor feedback. The success of this issuance further underscores the World Bank’s continued pre-eminent status in the SSA universe,” said Navindu Katugampola, Head of SSA Origination, Morgan Stanley.

“In a bull market it is that much harder for a stellar transaction to stand out from crowd – but once again the World Bank has managed just that. The quality of the distribution at pricing that would have looked overly ambitious even just days ago speak to the unique and special status of World Bank in the market,” said Jigme Shingsar, Head of US SSAs, RBC Capital Markets.


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 and the original member of the World Bank Group. 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 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 sustainable development bonds in the international capital markets for over 60 years to fund its 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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