World Bank Raises USD 5.25 billion

The World Bank (IBRD, Aaa/AAA) today priced a dual-tranche transaction raising a total of USD 5.25 billion through USD 4 billion 3-year and USD 1.25 billion 7-year global benchmark bonds.

The transaction was significantly oversubscribed with 145 total orders across both tranches, a total final order book of USD 6.2 billion and strong official institution, bank treasury and fund manager participation. The joint-lead managers for this global bond are Bank of America Merrill Lynch, Citi, Morgan Stanley and RBC Capital Markets.

The 3-year tranche carries a semi-annual coupon of 1.000% and matures on October 5, 2018.  It offers investors a yield of 1.058%, which is equivalent to a spread of 14.7 basis points over the 1.00% U.S. Treasury note due September 15, 2018.

The 7-year tranche carries a semi-annual coupon of 1.875% and matures on October 7, 2022.  It offers investors a yield of 1.894%, which is equivalent to a spread of 14.15 basis points over the 1.75% U.S. Treasury note due September 30, 2022.

“We are delighted with the strong demand for this transaction.  The dual-tranche approach served us well, allowing us to raise a large amount to fund our development programs, offer our core investor base the 3-year maturity which is in very strong demand, and deepen our presence in the longer end of the yield curve with the 7-year tranche.  We appreciate the continued support from investors and comfort they take in World Bank bonds – especially during times of market volatility and uncertainty,” said George Richardson, Head of Capital Markets at the World Bank.

The present transaction is consistent with the World Bank’s longstanding practice of deploying its franchise as an issuer in the international capital markets to offer investor’s high-quality, liquid instruments.  This approach has direct benefits for World Bank member countries as well, since as a cooperative institution it is able to fund its activities as a provider of financial services to its members on highly attractive terms.

Investor Distribution of the USD 4 billion 3-year USD Benchmark:
By Geography By Investor Type
Europe
40%
Central Banks / Official Institutions
57%
Asia
33%
Banks / Bank Treasuries / Corporates
24%
Americas
25%
Asset Managers
19%
Middle East and Africa
2%

Investor Distribution of the USD 1.25 billion 7-year USD Benchmark:

By Geography By Investor Type
Europe
52%
Central Banks / Official Institutions
49%
Asia
28%
Banks / Bank Treasuries / Corporates
35%
Americas
20%
Asset Managers / Pension / Insurance
16%

Transaction Summary:

Issuer:
World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating:
Aaa/AAA
Tranche:
3-year
7-year
Amount:
USD 4 billion
USD 1.25 billion
Settlement date:
October 7, 2015 October 7, 2015
Coupon:
1.000% 1.875%
Coupon payment dates:
April 5 and October 5
(semi-annual, short first)
April 7 and October 7
(semi-annual)
Maturity date:
October 5, 2018 October 7, 2022
Issue price:
99.830% 99.876%
Issue yield:
1.058% 1.894%
ISIN:
US459058ER04 US459058ES86
Listing:
Luxembourg Stock Exchange
Clearing system:
Fedwire, Euroclear, Clearstream
Joint lead managers:
Bank of America Merrill Lynch, Citi, Morgan Stanley, RBC Capital Markets
Senior Co-lead managers:
BMO, Credit Agricole, Daiwa, Nomura
Co-lead managers:

BNP Paribas, Barclays, Credit Suisse, Deutsche Bank, HSBC, J.P. Morgan, FTN, Goldman Sachs, SEB, RBS, Wells Fargo, TD Securities

Joint lead manager quotes:

“Once again, the World Bank has employed the dual-tranche strategy to great effect. The issuer’s ability to access diverse investor bases across both tranches is particularly impressive in light of recent market volatility. The transaction is an ideal continuation of their USD Benchmark program for 2015-16,” said Adrien de Naurois, SSA Syndicate at BofA Merrill Lynch.

“IBRD has again demonstrated outstanding market access with this USD 5.25 billion dual tranche transaction. To achieve an issue of this size in these challenging markets is a phenomenal success and testament to the IBRD franchise,” said Philip Brown, Head of Public Sector DCM at Citi.

“The USD SSA marketplace has been challenging since the end of the summer, and it needed a flagship issuer like the World Bank to reinvigorate it with a textbook transaction. This dual tranche deal demonstrated the World Bank’s continued appeal to investors across the curve, as well as its ability to dynamically and proactively respond to market conditions and investor feedback. The success of this issuance further underscores the World Bank’s continued pre-eminent status in the SSA universe,” said Navindu Katugampola, SSA Origination at Morgan Stanley.

“Given the recent volatility we clearly needed that rare combination of high quality credit, precise timing and a bit of courage thrown in for good measure and the results leave no doubt as to the World Bank’s special ability to attract a high quality investor base – the World Bank team are to be congratulated for maintaining an amazing track record in the face of very uncertain markets,” said Jigme Shingsar, Head of US SSAs at RBC Capital Markets.

About the World Bank

The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization created in 1944. It operates as a global development cooperative owned by 188 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. The World Bank has been issuing bonds in the international capital markets for over 60 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.

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