The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 3.5 billion Norwegian krone-denominated Sustainable Development Bond. This transaction is part of the World Bank’s effort to issue Sustainable Development Bonds while highlighting the urgency of mainstreaming climate action.
World Bank bonds support the financing of projects that contribute to climate action. The World Bank’s updated Climate Change Action Plan helps countries integrate climate change into their development strategies and apply climate financing in ways that achieve the most positive impact. In fiscal year 2021, which ended June 30, 2021, ninety-five percent of all IBRD projects had climate components accounting for 33% of financing.
The NOK 3.5 billion 4.5-year floating-rate bond matures on June 18, 2026. Skandinaviska Enskilda Banken (SEB) acted as Lead Manager for the transaction. The bond offers a quarterly coupon of Nibor + 150 bps and was priced at 106.763%.
Norwegian investors accounted for 86% of the distribution of bond, while Swedish investors comprised the remaining 14%. Banks represented the majority share of allocations at 96%, followed by asset managers and pension/insurance funds at 4%.
The following investors participated in the transaction: DNB Treasury, Oslo Pensjonsforsikring, Sparenbanken Vest and Sparebank 1 SR Bank.
Jorge Familiar, World Bank Vice President and Treasurer, said, “We are pleased to return to the NOK market with this Sustainable Development Bond while highlighting the mainstreaming of climate action in all World Bank activities in our engagement with investors. We thank investors for their support of the World Bank’s mission, including our focus on climate.”
Transaction Summary
Issuer: | World Bank (International Bank for Reconstruction and Development, IBRD) |
Issuer rating: | Aaa /AAA (Moody’s/S&P) |
Currency: | NOK |
Amount: | NOK 3,500,000,000 |
Settlement date: | January 20, 2022 |
Maturity date: | June 18, 2026 |
Issue price: | 106.763% |
Issue yield: | DM-5 bps |
Denomination: | NOK 10,000 |
Coupon: | 3m Nibor + 150 bps |
Coupon payment dates: | 18 March, 18 June, 18 September, and 18 December in each year, up to and including the Maturity Date |
Listing: | Luxembourg Stock Exchange |
ISIN: | XS2434337031 |
Clearing system: | Euroclear/Clearstream |
Lead manager: | Skandinaviska Enskilda Banken, Stockholm |
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