World Bank Raises USD 4.5 Billion With 4-Year SOFR-Linked and 7-Year Fixed Rate Bonds

WASHINGTON, D.C., September 14, 2022 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced two Sustainable Development Bonds, raising a total of USD 4.5 billion with a USD 1.5 billion 4-year bond linked to the Secured Overnight Financing Rate (SOFR), maturing in September 2026, and a USD 3 billion 7-year fixed rate bond maturing in September 2029.

The transactions attracted over 115 orders totaling more than USD 5.7 billion appealing to investors seeking a high credit quality investment while supporting sustainable development. Barclays, BMO Capital Markets, JP Morgan, and RBC Capital Markets were the lead managers for the transactions. The bonds will be listed on the Luxembourg Stock Exchange.

The 4-year SOFR-index linked tranche pays a coupon of compounded SOFR +31 basis points. The 7-year tranche priced at a spread versus the reference US Treasury of +22.5 basis points.

“We thank investors in today’s dual tranche transaction for their ongoing support for the World Bank’s sustainable development activities,” said Jorge Familiar Vice President and Treasurer, World Bank.”By issuing SOFR-index linked and fixed rate tranches at the same time, we were able to reach a wider range of globally diverse investors.”

Investor Distribution

Lead Manager Quotes

“The World Bank has again demonstrated its lead positioning and unmatched depth of investor following in the Sovereign, Supranational and Agency (SSA) market with today’s successful deal. The issuer’s long-standing strategy to establish and develop multiple products, to benchmark standard, meant that they were able to match evolving investor appetite, in a volatile environment, with a perfectly balanced dual tranche offering across fixed and floating coupon formats. Two orderbooks of large size and high quality, for entirely different but complementary products, pay strong compliments to the work of the World Bank team – Barclays was honored to support this transaction,” said Lee Cumbes, Managing Director, Head of EMEA DCM, Barclays.

“Once again a trailblazer in SSA markets, World Bank prices the first-ever dual-tranche fixed-rate and SOFR FRN transaction. In a turbulent market, attracting a high quality orderbook greater than USD 5.7 billion speaks to the quality and global appeal of IBRD. Responding to short and long duration demand, the World Bank’s fixed and floating format attracted interest from a diverse set of investors,” said Sean Hayes, Managing Director & Head of US Syndicate & Credit Sales, BMO Capital Markets.

“Congratulations to the World Bank team on today’s successful dual-tranche transaction. World Bank has shown yet again its ability to respond quickly to investor needs – tapping into clear pockets of demand for floating-rate product in a rising interest rate environment, as well as taking advantage of the return of demand for longer-dated assets. The combined USD 4.5 billion deal size demonstrates the depth of the World Bank’s global investor base as well as the strong support for its development mission,” said Keith Price, Managing Director and Head of Frequent Borrower Group, J.P. Morgan.

“The World Bank’s success in navigating a volatile market to raise USD 4.5 billion speaks to the continued strength of the credit as well as the continued demand for their pioneering Sustainable Development Bond format. The rare floating and fixed dual tranche structure offered investors an opportunity to express their rate views in either direction during a period of uncertainty and provided incremental demand that enhanced the final distribution,” said Jigme Shingsar, Managing Director, RBC Capital Markets.

Transaction Summary