WASHINGTON, DC, September 14, 2021 - The International Development Association (IDA, Aaa/AAA) priced a 7-year Sustainable Development Bond that raised GBP 1.5 billion. The benchmark marks IDA’s third issuance in British pounds, and second in the 7-year tenor since the development institution debuted in the capital markets in 2018. IDA previously issued a GBP 1 billion 7-year transaction in February 2021. IDA has a natural need to raise funding in pound sterling, as well as other Standard Drawing Rights (SDR) component currencies, since SDR is IDA’s functional currency.
The bond has an annual coupon of 0.75% and an issue price of 99.827%. The bond’s spread over the 0.125% Gilt reference bond equals +29 basis points, offering investors an annual yield of 0.775%.
“We were very encouraged with the high level of investor demand for IDA’s first benchmark in British pounds of its funding year,” said Jingdong Hua, Vice President and Treasurer, World Bank. “IDA’s capital market program helps it deliver programs to boost economic growth, reduce inequalities and improve people’s living conditions.”
Investor Distribution
By Geography | By Investor Type | ||
United Kingdom | 70% | Banks/ Bank Treasuries/Corporates | 48% |
EMEA | 22% | Central Banks/Official Institutions | 29% |
Asia | 3% | Asset Managers / Insurance / Pension Funds | 23% |
Americas | 5% |
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Lead Manager Quotes
“An outstanding return to the sterling market for IDA as it continues to build out its sterling curve. The high quality orderbook allowing a final deal size of 1.5 billion once again reiterates the ongoing work to position IDA as key player in the Supranational, Sovereign and Agency (SSA) market and the importance of the institution's mandate to end extreme poverty and promote shared prosperity in a sustainable manner,” said Adrien de Naurois, Managing Director, BofA Securities.
Barclays is honored to joint lead manage IDA’s first sterling issuance of the new fiscal year, a transaction that adds to the first set of sterling transactions from the borrower. Investing for purpose is an important consideration for investors globally, making IDA an attractive name for investors. Its mission to end extreme poverty and build shared prosperity is of global importance, and a crucial pillar supporting progress towards the Sustainable Development Goals,” said Lee Cumbes, Head of Debt Capital Markets EMEA, Barclays.
“IDA’s return to the GBP market was a big success yielding a diverse and large orderbook. The global investor base for IDA remains on a positive growth trajectory as the market becomes more familiar with its mission and the ESG goals it pursues. We at RBC are honored to be associated with this transaction and congratulate the IDA team on excellent market timing and the heavy lifting that has brought the funding program so far in such a short time,” said Jigme Shingsar, Managing Director, RBC Capital Markets.
“We were delighted to act as a joint bookrunner on IDA's 7-year GBP benchmark transaction. The standout aspect of this bond offering is the depth of demand for the IDA name from the sterling fixed income investor base. As the largest primary transaction this year in the SSA GBP market, IDA succeeded in mobilizing critical development finance from its sustainable development bond programme. We congratulate the issuer on their largest 7-year GBP issuance to date and the growing recognition of IDA as a borrower in the markets,” said Laura O'Connor, Managing Director, TD Securities.
Transaction Summary
Issuer: | International Development Association (IDA) |
Issuer rating: | Aaa/AAA |
Amount: | GBP 1,500,000,000 |
Format | Reg S - Registered Notes |
Settlement date: | September 21, 2021 |
Maturity date: | September 21, 2028 |
Issue price: | 99.827% |
Issue yield: | 0.775% annual |
Coupon: | 0.75% p.a. |
Clearing systems: | Clearstream, Euroclear |
Denomination: | GBP 1,000 |
Listing: | Luxembourg Stock Exchange |
ISIN: | XS2388161650 |
Lead managers: | Barclays Bank PLC, Merrill Lynch International, RBC Europe Limited, TD Global Finance unlimited company |
This press release does not constitute or form part of and should not be construed as an offer for sale or issue or the solicitation of an offer to buy or acquire the securities described in any jurisdiction or an inducement to enter into investment activity. No part of this press release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. The offering and sale of the securities described in this document are subject to restrictions under the laws of several jurisdictions. Securities may not be offered or sold except in compliance with all such laws.
Net proceeds of the securities described herein are not committed or earmarked for lending to, or financing of, any particular projects or programs, and returns on the securities described herein are not linked to the performance of any particular project or program.
About IDA
The International Development Association (IDA), rated Aaa/P-1 and AAA/A-1+ (Moody’s/S&P), is one of the largest sources of funding for fighting extreme poverty in the world’s poorest countries. Since its establishment in 1960, IDA has provided about USD400 billion for investments in over 100 countries. As an institution of the World Bank Group, IDA combines global expertise with an exclusive focus on reducing poverty and boosting prosperity. Proceeds of IDA bonds support sustainable development projects and programs in IDA eligible countries. Projects and programs supported by IDA are designed to achieve a positive social impact and undergo a rigorous review and internal approval process aimed at safeguarding equitable and sustainable economic growth. Information on IDA bonds is available at https://treasury.worldbank.org/IDAfunding
Contact
Heike Reichelt, Head of Investor Relations and Sustainable Finance, World Bank Treasury,
IDAInvestorRelations@worldbank.org
+1 202 477 2880