WASHINGTON, DC, June 3, 2020 - The International Development Association (IDA, Aaa/AAA) returned to the US dollar market with a 7-year benchmark bond that raised USD 1 billion. The bond matures on June 10, 2027.
The bond offers a semi-annual coupon of 0.750% per annum and semi-annual yield of 0.839%. It was priced at +24.75 basis points over the 0.5% US Treasury dated May 31, 2027.
BofA Securities, Deutsche Bank, HSBC, RBC Capital Markets are the joint lead managers for the transaction.
This transaction is IDA’s fourth benchmark issuance and its second in US dollars. It is part of IDA’s strategy to build its investor base and offer benchmark bonds in various currencies and maturities to expand its yield curve. IDA’s previous bonds were issued in April 2018 (5-year USD 1.5 billion), October 2019 (7-year EUR 1.25 billion) and January 2020 (5-year GBP 1.5 billion).
IDA raises funds to support member countries in their sustainable development activities and has been engaging with investors on efforts to address the human and economic impacts of COVID-19.
“IDA has a sixty-year track record of achieving positive development impact around the world, and is now stepping-up in critical areas to help countries respond to COVID-19,” said Jingdong Hua Vice President and Treasurer, World Bank. “As we continue to build IDA’s presence in the capital markets with this transaction we are especially appreciative of the many first-time, as well as returning investors that participated.”
By Investor Type
Asset Managers/Insurance/Pension Funds
Central Banks/Official Institutions
Joint Lead Manager Quotes
“This highly successful return to the capital markets is a reflection of IDA’s critical role in supporting member countries for their sustainable development activities. This transaction marks the first supranational 7-year USD benchmark in almost a year and met with support from a global investor base. BofA is honored to have worked alongside IDA on this landmark transaction,” said Bernard Mensah, President of UK and CEEMEA and Co-Head of Global FICC Trading, BofA Securities.
“Deutsche Bank is honored to lead such a successful transaction for the International Development Association (IDA) in its second visit to the USD market. While IDA is still a relatively new issuer to the Sovereign, Supranational and Agency (SSA) market, today’s high-quality demand demonstrates that IDA’s 60-year track record as the largest and leading source of assistance for the world’s poorest countries is recognized and rewarded by the investor community. The new 7-year bond not only extends IDA’s USD maturity profile, but also speaks to the market access that IDA is building, supported by its rating and impactful mission. This deal sets another milestone for IDA to continue to rely on the capital markets in order to support its development programs across the globe,” said Katrin Wehle, Managing Director, SSA DCM, Deutsche Bank.
“IDA achieved an excellent outcome with its debut 7-year USD benchmark. The transaction attracted well-diversified investor support with notable participation from high-quality central banks, bank treasuries and real money accounts; testament to IDA’s strong and developing recognition in the global capital markets,” said Asif Sherani, Managing Director, HSBC.
"IDA’s growing capital market program reflects a very timely increase in support – even more so now with the significant human and economic impacts of Covid-19. The strong investor franchise of the World Bank Group is evident in the high-quality investor base who welcome an opportunity to contribute to sustainable development. This transaction successfully extends IDA’s curve and demonstrates the market access it is establishing for longer term funding while very nicely setting the stage for a growing funding program in the future," Jigme Shingsar, Managing Director, RBC Capital Markets.
International Development Association (IDA)
June 10, 2020
June 10, 2027
0.750% per annum paid semi-annually
Luxembourg Stock Exchange
BofA Securities, Deutsche Bank, HSBC, RBC Capital Markets
Senior co-lead managers:
Nomura, SEB, TD Securities
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.
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 http://www.worldbank.org/en/about/unit/treasury/ida.
Head of Investor Relations and New Products
The World Bank
+1 202 477 2880