WASHINGTON, D.C., June 17, 2020 – The International Development Association (IDA, Aaa/AAA) made its debut in Swedish krona with a 5-year benchmark bond that raised SEK 4.5 billion. The bond matures on June 25, 2025. Skandinaviska Enskilda Banken (SEB) and Nordea are the joint lead managers for the transaction.
The bond offers an annual coupon of 0.25% and an annual yield of 0.290%.
This transaction complements the inaugural IDA bonds issued in April 2018 (USD 1.5 billion benchmark), October 2019 (EUR 1.25 billion benchmark), January 2020 (GBP 1.5 billion benchmark).
IDA bond proceeds support the financing of projects and programs in eligible IDA countries as they advance the Sustainable Development Goals, including those which are helping support member countries as they respond to the human and economic impacts of COVID-19.
Jingdong Hua, Vice President and Treasurer, World Bank, said: “We are grateful to investors for their continued and strong support for IDA’s development mission in this inaugural Swedish krona benchmark bond. Accessing capital markets allows IDA to scale up development impact and programs alongside donor support to address some of the world’s biggest challenges and help communities lift themselves out of poverty. Support for IDA is critical, now more than ever, as IDA countries need to mobilize resources to respond to the COVID-19 pandemic”.
Investor Distribution
By Geography | By Investor Type | ||
Sweden | 58% | Asset Managers | 60% |
Denmark | 40.0% | Pension Funds | 33% |
Other | 2% | Banks | 7% |
Joint Lead Manager Quotes
Christopher Flensborg, Head of Climate and Sustainable Finance, SEB, said: “For SEB it is a great privilege to assist its clients in supporting the important mission of ÍDA – especially in times of COVID-19 where economies globally – but particularly low-income countries, need additional support. We are impressed and encouraged by the way investors and issuers, like IDA, work together to address and tackle global challenges”.
Kamal Grossard-Amin, Head of SSA Origination, Nordea, said: “Nordea is proud to support the fantastic efforts of IDA to fight extreme poverty as well as their recent efforts to address the impacts of COVID-19. This inaugural SEK issue clearly demonstrates the recognition in the market of the importance and caliber of IDA as an issuer and opens the door for them to be established as one of the key players in the SEK SSA market”.
Tony Persson, Head of Fixed Income and Strategy, Alecta said: “During the COVID-crisis we have worked closely with international bond issuers, Swedish companies, municipalities and regions to be a positive force toward recovery from the economic events that the pandemic has caused. We are glad to be able to invest in this IDA bond which we know will enable IDA to continue to support the world’s poorest countries to get through these troubling times”.
The following investors also participated in the transaction:
Folksamgruppen
Kåpan Pensioner
Lannebo Sustainable Corporate Bond
Nordea Asset Management
SEB Investment Management AB, including SEB Företagsobligation Hållbar
Swedbank Robur Fonder
Transaction Summary
Issuer: | International Development Association (IDA) |
Issuer rating: | Aaa/AAA |
Amount: | SEK 4,500,000,000 |
Format: | Reg S |
Settlement date: | June 25, 2020 |
Maturity date: | June 25, 2025 |
Issue price: | 99.802% |
Issue yield: | 0.290% |
Coupon: | 0.25% paid annually in arrears, calculated on a ISMA 30/360 day count basis |
Denomination: | SEK 10,000 + 10,000 |
Listing: | Luxembourg Stock Exchange |
Lead managers: | Nordea Bank Abp and Skandinaviska Enskilda Banken (SEB) |
ISIN: | XS2193964900 |
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.
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 USD 400 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.
Contact
Heike Reichelt
Head of Investor Relations and New Products
The World Bank
+1 202 477 2880
idainvestorrelations@worldbank.org