Debt Products FAQs

Background on the World Bank´s Activities in the Financial Markets

  1. The International Bank for Reconstruction and Development (IBRD), generally referred to as the World Bank, is one of the largest international borrowers in the world. It is also one of the most frequent international bond issuers with hundreds of transactions per year. The World Bank was founded in 1944 and issued its first bond in 1947. Since then, it has continuously developed innovative debt products, opened up new markets for issuance, and built-up a broad investor base around the world. Bonds issued by the World Bank are AAA-rated (highest possible bond rating) by Moody´s and S&P. 

    The World Bank's borrowing requirements are primarily determined by its lending activities for development projects. As World Bank lending has changed over time, so has its annual borrowing programs. In fiscal year 2018, the World Bank issued debt securities for a total volume equivalent to US$36 billion. For fiscal year 2019 and beyond, annual bond issuance is expected to be around US$50-55 billion. As of June 30, 2018, the amount of total borrowings outstanding was US$214 billion. 

    The International Finance Corporation (IFC), the private sector lending affiliate of the World Bank, also offers debt instruments.



Characteristics of World Bank Debt Instruments

  1. Individual debt instruments issued by the World Bank are not direct obligations of any government. However, World Bank debt instruments are collectively backed by the capital commitments of its member countries. This is one of the reasons why rating agencies and other members of the financial community often refer to the World Bank as a "quasi-sovereign" issuer. The World Bank has a AAA-rating from Moody´s and S&P. 

    At the present time, the World Bank has 189 sovereign shareholders. The largest shareholders include the United States (16.88% of total subscribed capital), Japan (7.26%), China (4.68%), Germany (4.24%), and France and the United Kingdom (with 3.97% each). Of the World Bank's total subscribed capital of US$274.7 billion, US$258.3 billion is callable capital. This latter capital can only be called from our shareholders for the purpose of satisfying claims by World Bank debt holders or meeting certain guarantee obligations. Over the course of its 70-year history, the World Bank has never made a capital call.




World Bank Debt Product Offerings

  1. The World Bank offers a wide range of debt instruments available in the capital markets. For 70 years, the World Bank has continuously working to develop new types of debt products in order to meet the specific needs of both its institutional and retail investors throughout the world. 

    World Bank debt instruments can be classified into four main categories: (i) benchmark and global bonds in major world currencies that provide high liquidity and spread performance and are generally placed with institutional investors; (ii) plain vanilla and emerging currency bonds that offer a potential yield pick-up for retail and institutional investors without credit risk; (iii) structured notes that are often custom-made to fit the particular asset and liability management requirements of institutional investors, and (iv) USD discount notes with maturities of 360 days or less. 

    The primary objective of issuing World Bank debt instruments is to meet investors' needs by providing a maximum degree of flexibility in its debt offerings. 

    The World Bank issues bonds in a variety of ways: on very short notice and at any local business time; in most of the active borrowing currencies; in most maturities and issue sizes; in Eurobond, global bond or domestic bond formats; as registered or bearer bonds, in either definitive or global note forms; using a variety of settlement and clearing systems; and with a multitude of structured note elements and options such as calls and puts, floating and fixed-rate coupons, and equity and foreign exchange-linked coupons and redemptions. The World Bank works daily with a broad range of financial houses so as to utilize underwriters' strengths and deliver the best possible value to investors.










Buying and selling World Bank Debt Instruments

  1. World Bank bonds can be bought and sold through security houses, commercial banks, dealers and brokers. Investors should contact their local financial service providers for information on specific World Bank securities, including prices and availability. Prices are quoted on many securities exchanges, the major electronic trading platforms, and in selected financial newspapers. 

    The World Bank is a leader in maintaining close relationships with a broad range of underwriters in all financial markets. World Bank debt securities have been brought to the market by some 30 different lead managers. Many of the new bond issues include additional financial houses and banks in the bond syndicate to ensure a broad geographical distribution and firm primary placement of the bonds. Discount notes of the World Bank are sold through a group of dealers under the Discount Notes Program (please see the Discount Notes Program Offering Circular for a list of the dealers).




Listing, Clearing and Legal Aspects

  1. World Bank bonds are listed on many of the main securities exchanges in the world. For the majority of Eurobonds that we issue, the Luxembourg Stock Exchange will be a place of listing. World Bank bonds issued under the domestic law of the bond currency country will frequently be listed on the stock exchange of that same country. In some cases, investors prefer our debt securities to not be listed and to purchase these instruments as a private placement.

     





Sources for Further Information

  1. Investors and other parties that require more information on World Bank debt instruments can contact us directly by sending an email to debtsecurities@worldbank.org or a fax to +1 (202) 477-8355.