World Bank prices New Zealand dollar-denominated dual tranche bonds

The 10-year NZD 300 million bond offers a coupon of 1.25% p.a. payable semi-annually with a December 10, 2030 maturity and has an issue price of 99.448671% to yield 1.309% (semi-annual).

The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) has priced a New Zealand dollar-denominated dual tranche of NZD 1 billion and NZD 300 million fixed-rate global Sustainable Development Bond transactions.

The 5.5-year NZD 1 billion bond offers a coupon of 0.75% p.a. payable semi-annually with a June 10, 2026 maturity and has an issue price of 99.967736% to yield 0.756% (semi-annual). This equates to a spread of 43.1 basis points over the 2.75% New Zealand Government Bond due April 15, 2025.

The 10-year NZD 300 million bond offers a coupon of 1.25% p.a. payable semi-annually with a December 10, 2030 maturity and has an issue price of 99.448671% to yield 1.309% (semi-annual). This equates to a spread of 41.4 basis points over the 1.50% New Zealand Government Bond due May 15, 2031.

The benchmark lines were launched with an initial minimum target size of NZD 200 million and NZD 100 million respectively and increased due to very high investor demand. The new 5.5-year is the World Bank’s largest-ever NZD benchmark bond and the largest of any Sovereign, Supranational, and Agency (SSA) issuer of any maturity in a single offering in the Kauri market.

Collectively over 2020, the World Bank has issued NZD 2.9 billion in the Kauri market in maturities ranging from 2024 to 2030.

The bonds were distributed to a broad range of institutional investors both domestically and internationally; 89% with New Zealand and 11% with international investors for the 5.5-year maturity, and 92% with New Zealand, and 8% with international investors for the 10-year maturity. Both tranches were distributed among asset managers, bank treasuries, and official institutions.

The joint-lead managers for the transaction are ANZ Bank New Zealand Limited (ANZ), Bank of New Zealand (BNZ), and Commonwealth Bank of Australia (CBA).

“This is a fantastic trade. It’s our first dual-tranche transaction in New Zealand Dollars,” said Andrea Dore, Head of Funding, World Bank. “The dual-tranche trade allowed us to reach different investor groups and offer them a high-quality, liquid product. We thank investors for their support of the World Bank’s sustainable development mission to end extreme poverty and boost shared prosperity in member countries.”