Imfino News

Washington, D.C., November 13, 2018—The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced green bonds that raised US$eq. 1.3 billion through over 60 orders from investors that are committed to following socially and environmentally responsible principles. The issuances mark the ten-year anniversary of the green bond and bring the World Bank green bond program to US$eq. 12.6 billion. The bonds were heavily oversubscribed and included first-time green bond investors.

Investors supporting these landmark transactions included: Achmea, ACTIAM, Affirmative Investment Management (AIM), Alecta, Amundi, Swedish national pension funds AP2 and AP3, AMF, APG on behalf of ABP and other pension fund clients, Barclays Treasury, California State Teachers' Retirement System (CalSTRS), Everence (Praxis Impact Bond Fund), Folksam Group, Groupe Mutuelle d'assurance des professionnels de la santé (MACSF), and PGGM on behalf of its clients.

In November 2008, the World Bank issued a green bond that created the blueprint for the market. The issuance was the first to define criteria for eligible green bond projects, and the first where investors received assurance, through a second party opinion provider, that eligible projects would address climate change. The World Bank was also the first to commit to investor reporting on the use of green bond proceeds and expected project impacts, setting the standard for the market and forming the basis for the green bond principles coordinated by ICMA, the International Capital Markets Association. It has led the development of the market through its own issuances and by supporting other issuers and engaging investors.

The latest World Bank green bonds consist of a US$ 600 million 7-year bond and a EUR 600 million 9-year bond. Orders from investors around the world reached US$eq. 1.4 billion, with strong demand for both currencies from asset managers in Europe and the US. The joint lead managers for the bonds are Bank of America Merrill Lynch, Credit Agricole CIB, Deutsche Bank and SEB.

The 7-year USD-denominated bond carries a semi-annual coupon of 3.125% per annum and matures on November 20, 2025. It offers investors a yield of 3.214% (semi-annual), which is equivalent to a spread of 14.9 basis points over the 3.00% U.S. Treasury note due October 31, 2025.

The 9-year EUR-denominated bond carries an annual coupon of 0.625% per annum and matures on November 22, 2027. It offers investors a yield of 0.685% (annual), which is equivalent to a spread of 40.4 basis points over the 0.50% German Bund note due August 15, 2027.

Arunma Oteh, World Bank Vice President and Treasurer, said: “The latest World Bank green bond offering is particularly significant as we mark the tenth anniversary of the green bond market. In November 2008, the World Bank launched the green bond market and catalyzed the market for sustainable investing—a market that has since grown exponentially with a diverse set of issuers and investors. The first green bond was transformational in helping to shift investor focus to environmental, social and governance commitments of issuers, and to understanding the use and impact of their financing. The universe of green bond investors has also expanded, as evidenced by the diverse order book of today’s anniversary offering. We appreciate investors’ commitment to the transformation of the capital markets through their push for increased transparency and search for investments that have a positive impact on society. We appreciate all our capital market partners as we continue our joint sustainability journey.”

The World Bank has raised US$eq. 12.6 billion through 150 green bonds in 20 currencies. Its green bond program includes a number of firsts—including the first USD green bond, the first in several emerging market currencies, and the first Kangaroo green bond. The basic green bond premise—with its model for use of proceeds definition, project selection, second party opinion, and impact reporting—is now being applied to other areas including social bonds, blue bonds, sustainable bonds, and other bonds that raise financing dedicated to a purpose. All follow the green bond model with its focus on transparency and impact.

With US$50-US$60 billion in issuances annually, all World Bank bonds support the financing of programs that support the Sustainable Development Goals. World Bank bonds are aligned with the sustainability bond guidelines published by ICMA. The World Bank is also a member of the Executive Committee of the Green Bond Principles. A key priority for the World Bank’s engagement in the capital markets is to build strategic partnerships with investors to raise awareness for the role of private sector financing in development.

Investor Quotes

Mehdi Abdi, Senior Fixed Income Portfolio Manager at ACTIAM said:"ACTIAM is pleased to participate in this new IBRD Green Bond. We are committed to contributing to the Sustainable Development Goals in order to improve economic, environmental and social living conditions".

Stuart Kinnersley, Managing Partner at Affirmative Investment Management said: “We are pleased to be part of IBRD’s new global green bond. IBRD issued the very first green bond in 2008 and has continued to be an innovative leader in the market since. We are very proud to have been able to work with IBRD through the years helping to address our critical environmental and social challenges.”

Magnus Billing, CEO at Alecta said: “We are sincerely honored to take part in this transaction marking the 10-year anniversary of the first green bond. The joint sustainability efforts in the financial market are crucial for us and for coming generations. This truly is a meaningful way to manage pension assets and create sustainable returns.”

Lars Lindblom, Portfolio Manager at AP2 said: “This marks the 10-year anniversary for the green bond market. When the opportunity to invest in the first green bonds was introduced in 2008 by the World Bank, we saw a unique opportunity to combine global fixed income management and our commitment to climate change. The World Bank has as a high quality issuer paved the way and played an important role for the development of the Green Bond Market”.

Kerim Kaskal, CIO at AP3 said: “AP3 is proud to participate in IBRD’s new green bond issue. Ten years ago, we invested in IBRD’s first green bond, and since then it has been an important goal for AP3 to promote the green bond market in order to address global climate challenges. We are very happy to have made a contribution towards a more sustainable world through IBRD’s green bond projects all over the world.”

Raymond Verstraelen, Head of Rates Portfolio Management at Achmea Investment Management said: “For Achmea Investment Management, green bonds are a valuable addition to the portfolios. The green bonds demonstrably support the financing of climate-friendly projects worldwide and fulfil at the same times the financial requirements of our clients. What appeals in the IBRD green bonds program is the diversity in projects aimed at both mitigation and adaptation. IBRD's impact report sets a high standard and contributes to a high level of confidence that the green bond actually has an impact.”

Michael Kjeller, Head of Folksam Group Asset Management & Sustainability Department, said: “The Folksam Group are delighted to be a partner to the World Bank as a dedicated investor in World Bank Green Bonds and Sustainable Development Bonds. The World Bank has been a source of inspiration and offered us great support in our commitment to sustainable investing. We congratulate the World Bank on its 10-year anniversary as a green bond issuer.”

Joint Lead Manager Quotes

“World Bank continues to move the needle in the green bond space with the first supranational dual-currency green bond, a perfect celebration of the 10-year anniversary of their first green bond. World Bank has consistently been a fantastic leader in this space, not only via their own issuance, but also by cultivating the investor base and teaching other issuers about the process.” said Suzanne Buchta, Managing Director, Global Head of ESG Capital Markets at BofA Merrill Lynch.

"This ground-breaking dual-tranche green transaction, in both euros and US dollars, very nicely highlights the 10th anniversary of the IBRD’s first green bond. It also demonstrates, once again, and in challenging market conditions, IBRD's capacity to attract new investors to this growing asset class. We are honored to have assisted them on this deal." said Tanguy Claquin, Head of Sustainable Banking at Credit Agricole CIB.

“IBRD’s dual tranche 9-year EUR 600 million and 7-year US$ 600 million green bond represents a milestone for the green bond market and green financing overall as it celebrates the 10-year anniversary of green bond issuance from one of the largest, most innovative and most impactful issuers in the green bond space. Along with the transaction announcement, IBRD explicitly encouraged dedicated green investors to participate in the transaction, which ultimately contributed to the superb quality of the final orderbook, dominated by global ESG portfolios. IBRD is a prime- and world-leading issuer of green bonds, therefore Deutsche Bank is proud and honored to have helped IBRD raise funds in Green format, in particular for such a historic transaction." said Gerald Podobnik, Global Head of Capital Solutions & Sustainable Financing and Head of FIG EMEA at Deutsche Bank.

“It is great to see such a great engagement around the 10-year green bond anniversary and even more encouraging to see the commitment, drive and action which the investors’ society shows to support climate investments. At SEB we are proud to be a part of this transaction and happy to see how the work with green bonds has inspired many colleagues to find ways to identify how intermediaries in collaboration with clients, can develop financial solutions to deal with waste and pollution challenges. We are looking forward to continue being a part of integrating societal task into investment strategies.” said Christopher Flensborg, Head of Sustainable Products and Product Development, at SEB.

Transaction Summary*

Investor distribution of the US$ 600 million 7-year USD-denominated global green bond

By Geography

By Investor Type

Europe

69%

Asset Managers / Insurance / Pension Funds

73%

Americas

31%

Banks / Bank Treasuries / Corporates

24%

Central Banks / Official Institutions

3%

Investor distribution of the EUR 600 million 9-year EUR-denominated global green bond

By Geography

By Investor Type

Benelux

36%

Asset Managers / Insurance / Pension Funds

77%

France

25%

Central Banks / Official Institutions

13%

Rest of Europe

19%

Banks / Bank Treasuries / Corporates

10%

Germany

17%

Asia

3%

Issuer:

The World Bank
(International Bank for Reconstruction and Development, IBRD)

Issuer rating:

Aaa (Moody’s) / AAA (S&P)

Currency:

US$

EUR

Maturity:

7-year

9-year

Amount:

US$ 600 million

EUR 600 million

Settlement date:

November 20, 2018

November 20, 2018

Coupon:

3.125% per annum

0.625% per annum

Coupon payment dates:

November 20 and May 20
of each year (semi-annual)

November 22 of each year

(annual)

Maturity date:

November 20, 2025

November 22, 2027

Issue price:

99.446%

99.478%

Issue yield:

3.214% (semi-annual)

0.685% (annual)

ISIN:

US45905U6L39

XS1912495691

Clearing:

Fedwire, Euroclear, Clearstream

Euroclear, Clearstream

Listing:

Luxembourg Stock Exchange

Joint lead managers:

BofA Merrill Lynch, Credit Agricole CIB, Deutsche Bank and SEB

Co-lead managers:

None

* This press release does not constitute an offer for sale of the securities described. 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 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 is the original member of the World Bank Group and operates as a global development cooperative owned by 189 countries. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income countries to support the Sustainable Development Goals and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing sustainable development bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. More information on World Bank bonds is available at: www.worldbank.org/debtsecurities.