WASHINGTON, DC, October 4, 2023 - The International Development Association (IDA, Aaa/AAA) today priced an 8-year Sustainable Development Bond raising GBP 800 million. The benchmark is IDA’s fourth issuance in British pound sterling, and its longest tenor in GBP since the development institution debuted in the capital markets in 2018. 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 4.750% and an issue price of 99.307%. The bond’s spread over the 0.250% July 2031 Gilt reference bond equals +32 basis points, offering investors an annual yield of 4.857%.
“IDA plays a critical role in supporting low-income countries to advance progress toward the Sustainable Development Goals and address the overlapping crises they are facing. We appreciate investors’ demand, particularly in longer tenors, which is helpful as we focus on extending the duration of our borrowing program in line with the long-term financing IDA provides to member countries,” said Jorge Familiar, Vice President and Treasurer, World Bank.
Investor Distribution
Distribution by Geography | Distribution by Investor Type |
| |
United Kingdom | 79% | Bank Treasuries | 76% |
EMEA | 2% | Central Banks / Official Institutions | 16% |
Americas | 19% | Asset Managers | 8% |
Lead Manager Quotes
“Barclays is honored to joint lead manage IDA’s return to the sterling market in over two years, with a Sustainable Development Bond that extends duration and delivers funding diversification for the borrower. Achieving the longest sterling benchmark in the sovereign, supranational, and agency (SSA) sector this year, illustrates sterling investors’ interest in IDA. Barclays is immensely proud to have supported IDA in this transaction and help its critical mission to end extreme poverty and build shared prosperity,” said Alex Paterson, Head of SSA DCM, Barclays.
“IDA re-opened the long-end part of the curve for the first time since before COVID-19 with this 8-year benchmark transaction. We congratulate the issuer on their longest-ever GBP benchmark to date and are delighted to have been a part of it,” said Edward Mizuhara, Managing Director, Public Sector Syndicate, BMO Capital Markets.
“Congratulations to the IDA team on their first benchmark of the year and a successful return to the GBP primary markets. The transaction generated significant support, despite a volatile market backdrop. This result underlines the global recognition of IDA’s mandate to support sustainable development projects in the world’s poorest nations,” said Asif Sherani, EMEA Head of Syndicate and Head of Public Sector DCM, HSBC.
“Congratulations to the IDA team for a successful return to the global markets. Despite the relative market volatility, the transaction showed investors’ interest in IDA. RBC was delighted to have been involved in this transaction,” said Jigme Shingsar, Managing Director, RBC Capital Markets.
Transaction Summary
Issuer: | International Development Association (IDA) |
Issuer rating: | Aaa/AAA |
Amount: | GBP 800,000,000 |
Format | Reg S - Registered Notes |
Settlement date: | October 13, 2023 |
Maturity date: | October 14, 2031 |
Issue price: | 99.307% |
Issue yield: | 4.857% annual |
Coupon: | 4.750% p.a. |
Clearing systems: | Clearstream, Euroclear |
Denomination: | GBP 1,000 |
Listing: | Luxembourg Stock Exchange |
ISIN: | XS2701725983 |
Lead managers: | Barclays, BMO Capital Markets, HSBC, and RBC Capital Markets |
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. Payments on the securities described herein are not funded by 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