WASHINGTON, DC, April 21, 2021 - The International Development Association (IDA, Aaa/AAA) priced a USD 2 billion 5-year benchmark that matures on April 28, 2026. This is IDA’s fifth US dollar bond since its market debut in 2018 and its first in the currency in 2021.
The bond offers a semi-annual coupon of 0.875% per annum and a semi-annual yield 0.940%. It was priced at 13.83 basis points over the 5-year U.S. Treasury. Citi, HSBC, Morgan Stanley and RBC Capital Markets are the lead managers.
“This ongoing evolution in IDA’s program is very encouraging. We are seeing that IDA’s growing issuance program provides liquidity to the market, which helps attract new investors,” said Jingdong Hua, Vice President and Treasurer, World Bank.“I’m grateful to all investors for their support. It enables IDA to quickly ramp up funding for developing countries as they tackle the human and economic impacts of the COVID-19 pandemic.”
Investor Distribution
Distribution by Geography | % | Distribution by Investor Type | % |
Americas | 45% | Central Banks / Official Institutions | 48% |
Asia | 29% | Banks / Bank Treasuries / Corporates | 46% |
Europe, the Middle East and Africa | 26% | Asset Managers / Insurance / Pension Funds | 6% |
Joint Lead Manager Quotes
"This is a strong transaction for IDA, pricing at the tightest spread to both swaps and US Treasuries of the 5 IDA dollar benchmarks to date. The size and quality of the order book reflects the extensive support that IDA and its mission has been building from the global investor community. Congratulations to the World Bank Treasury team,” said Philip Brown, Head of Public Sector Debt Origination, Citi.
“IDA was able to capitalize on constructive market conditions to achieve an excellent outcome with its first USD benchmark of 2021, securing USD 2 billion size for its 5-year issuance, whilst tightening the spread by 1 basis point through the bookbuild process. The transaction generated high-quality demand with limited price sensitivity, demonstrating IDA’s growing recognition in the global capital markets. HSBC is proud to have helped lead this important transaction. Congratulations to the IDA team,” said Asif Sherani, EMEA Head of Syndicate, HSBC.
“An excellent result for IDA for their first USD transaction of the year. This follows IDA's foray in the EUR market last week, highlighting the expansion of IDA's investor reach across the global investor base. At mid-swaps +4 basis points, the trade also represents their tightest ever USD issuance,” said Ben Adubi, Head of SSA Syndicate, Morgan Stanley.
“IDA’s focus on sustainable development finance in the most vulnerable countries is even more critical in the time of COVID and it is gratifying to see that investor support for this very important mission continues to grow. We are certain that this most recent USD benchmark offering is another firm step to establishing IDA as one of the premier credits in the capital markets offering such a rare combination of credit quality and greater purpose,” said Jigme Shingsar, Managing Director, RBC Capital Markets.
Transaction Summary
Issuer: | International Development Association (IDA) |
Issuer rating: | Aaa/AAA |
Amount: | USD 2,000,000,000 |
Format | 144A/Reg S – Registered Notes |
Settlement date: | April 28, 2021 |
Maturity date: | April 28, 2026 |
Issue price: | 99.683% |
Issue yield: | 0.940% semi-annual |
Coupon: | 0.875% per annum payable semi-annually in arrear |
Denomination: | USD 1,000 and multiples thereof |
Listing: | Luxembourg Stock Exchange |
Clearing systems: | DTC, Euroclear and Clearstream |
Lead managers: | Citi, HSBC, Morgan Stanley and RBC Capital Markets |
Senior co-lead managers: | TD Securities and National Bank Financial |
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