World Bank prices US$4 billion three-year global benchmark

The high-quality US$5.4 billion order book was significantly oversubscribed, with over 70 orders from investors in more than 22 countries.

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a US$4 billion 3-year global benchmark. This is the World Bank's second benchmark issuance of 2019 and first 3-year benchmark since July 2018.

The high-quality US$5.4 billion order book was significantly oversubscribed, with over 70 orders from investors in more than 22 countries. The order book was anchored by banks, insurance, and pension funds, as well as central banks and official Institutions. Joint lead managers for this bond are BMO Capital Markets, Citi, Deutsche Bank, and Nomura.

The three-year benchmark has a semi-annual coupon of 2.125% per annum and a maturity date of July 1, 2022. It offers investors a yield of 2.249%, equivalent to 5.3 basis points over the 2.125% UST due May 15, 2022. The final spread is amongst the tightest spreads to US Treasuries amongst the supranational community in over two decades.

"This is an excellent result - we are extremely pleased with the success of the World Bank's new 3-year USD global bond. The exceptionally tight spread to the underlying benchmark is a testament to the value investors place on the World Bank as the world's most established development institution. We thank our investors for their continued support of the World Bank's sustainable development mission - to end extreme poverty and promote shared prosperity in our member countries. Our clients benefit from low-cost funding that we pass on to borrowing members for their sustainable development activities", said Jingdong Hua, Vice President and Treasurer, World Bank.

"An incredible outcome. At US Treasuries plus 5.3 basis points, it is the tightest priced benchmark transaction in fixed income markets by any debt borrower this year. Global investors do not miss an opportunity to own the highest credit quality and exposure to investing for the impact that World Bank bonds offer", said Sean Hayes, Managing Director & Head of US Syndicate at BMO Capital Markets.

"A phenomenal transaction pricing at the tightest spread to US Treasuries, the supranational and agency market has seen in the last two decades for benchmark transactions. The positive spread to swaps attracted strong demand from bank treasury accounts, which compliments the massive and loyal support which World Bank enjoys from central banks. We're delighted to have been a part of this historic trade", said Philip Brown, Head of Public Sector Debt Capital Markets at Citi.

"This fantastic transaction underscores the World Bank's position as a leading issuer in the SSA space. The World Bank successfully navigated a relatively difficult market which has been experiencing some swap spread volatility recently. Attracting so many high-quality investors in this more uncertain market environment is an excellent result and once again demonstrates its exceptional access to the global investor base", said Katrin Wehle, SSA DCM Director at Deutsche Bank.

"The World Bank continues to lead by example, set records and with this trade has filled a gap in the undersupplied 3-year sector whilst recalibrating US treasury spreads at previously unimaginable levels. Given the recent market volatility, it required a true market pioneer to test the market here and the broad demand is a testament to the track record and global appeal of the World Bank", said Spencer Dove, SSA DCM Managing Director at Nomura.

The World Bank issues approximately US$50 billion bonds annually, the net proceeds of which will be used to finance sustainable development projects and programs in the World Bank's member countries. A key priority for the World Bank's engagement in the capital markets is to build strategic partnerships with investors and other market participants to raise awareness for development challenges and accelerate opportunities to mobilize finance for development.