World Bank Announces Euro 1.5 Billion 10-year Sustainable Development Bond in Ireland

28th May 2019 by Emma Goring

World Bank engages with investors on the Sustainable Development Goals as Ireland prepares high-level sustainable finance workshop hosted in Dublin.

The World Bank has priced a 10-year Global Sustainable Development Bond, raising EUR 1.5 billion from institutional investors around the globe, to finance its sustainable development activities. This is the World Bank’s first 10-year EUR global bond in 10 years, and its first EUR global bond since August 2018 when it issued a 16-year EUR 750 million bond transaction.

Barclays, J.P. Morgan, Natixis and TD Securities are the lead managers for the transaction. The bond will be listed on the Luxemburg Stock Exchange and an application will be made to list it on Euronext Dublin.

The EUR 1.5 billion global bond was well oversubscribed, with an orderbook reaching EUR 2 billion with orders from 69 investors. The bond priced with a final spread to the reference Bund of +36.8 basis points.

The timing of this bond coincides with the first workshop, “Catalyzing Global Savings to Advance Our Sustainability Goals” held in Dublin on May 15-16, 2019, that convenes bond issuers, investors, and other key market participants for action on the Sustainable Development Goals (SDGs). The event highlights Ireland’s role in sustainable finance efforts to channel more institutional savings towards sustainable projects around the globe and follows Dublin’s recent designation as a European hub of the Financial Centers for Sustainability (FC4S) network and Ireland’s issuance of its first green bond.

Paschal Donohoe TD, Minister for Finance & Public Expenditure and Reform, Ireland said: “Ireland has articulated an ambitious strategy to help achieve the sustainable development goals, through the new development policy “A Better World”. Working together with the development and financial community is a key part of our strategy. We welcome the World Bank’s new sustainable development bond to raise awareness for SDGs that are aligned with our priority areas of prioritizing gender equality, reducing humanitarian need, climate action, and strengthening governance.”

Jingdong Hua, World Bank Vice President and Treasurer, said: “This bond demonstrates strong interest and commitment of investors to support the Sustainable Development Goals through World Bank bonds. We appreciate their continued support and the collaboration with our Irish partners as we work together to leverage the capital markets and connect finance to a more equal, peaceful and sustainable world.”

Daryl Byrne, CEO of Euronext Dublin, said: “We’re delighted that the World Bank has chosen to list their EUR 1.5 billion World Bank Sustainable Development Bond on Euronext Dublin. Euronext is committed to playing its part in the transition towards a sustainable society.”

The World Bank’s goals of ending extreme poverty by 2030 and promoting shared prosperity in a sustainable manner are aligned with the SDGs. Increasingly, investors and other market participants are using the SDGs as a framework for investment and way to communicate support for specific development priorities. With this Sustainable Development Bond, the World Bank raises awareness for SDG#2 (Zero Hunger), SDG#5 (Gender Equality), SDG#13 (Climate Action), and SDG#16 (Peace, Justice and Strong Institutions). The bond offers its investors an attractive opportunity to align financial and social objectives.

The SDGs highlighted with the World Bank’s new sustainable development bond align with Ireland’s key focus areas for development: prioritizing gender equality, reducing humanitarian need, climate action, and strengthening governance, and present an opportunity to engage with Irish government officials and market participants.

With annual issuances between US$40-US$50 billion, World Bank bonds support the financing of programs that support the SDGs. World Bank bonds are aligned with the sustainability bond guidelines published by the International Capital Markets Association (ICMA). The World Bank is also a member of the Executive Committee of the Green and Social 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 sustainable development.

Joint Lead Manager Quotes

“The World Bank’s first new Euro benchmark issue of 2019 delivered a fantastic result, at EUR 1.5 billion size being its largest Euro-denominated issue in more than a decade, all delivered at very tight pricing versus comparables. This Sustainable Development bond reinforces the World Bank’s mission to eliminate extreme poverty and boost prosperity in the institutions’ middle-income member-states, providing a clear opportunity for buyers to have a real impact through their investment. Barclays was honored to be involved in this important transaction,” said Lee Cumbes, Head of Public Sector EMEA, Barclays.

“Once again, the World Bank has demonstrated the high regard in which it is held with investors globally – its return to the Euro market with its first 10-year benchmark in 10-years has also resulted in its largest EUR benchmark in that time period.  A stellar performance with a high quality and diversified orderbook.  J.P. Morgan is delighted to have partnered with World Bank on this prestigious transaction,” said Keith Price, Managing Director, Head of Frequent Borrowers Group, J.P. Morgan.

“The World Bank achieved another tremendous success in the euro market with its first euro denominated benchmark for 2019. The new Euro 1.5 billion 10-year Sustainable Development Bond transaction has attracted top quality orders and demonstrated the ability of the World Bank to attract new European investors and to continue its key objective of diversification. Despite market uncertainties, the smooth execution of this transaction once again emphasizes the unique quality of the issuer. The World Bank has achieved the tightest 10-year Euro benchmark yet in 2019. We are proud to be part of this success,” said Nabil Menai, Global Head of Public Sector DCM, Natixis.

“A combination of rarity value, quality of name and timing has led to the largest EUR benchmark transaction for the World Bank in EUR in the past ten years. This creates a new liquid benchmark point of reference for the World Bank curve.  Managing to price the tightest benchmark 10-year year-to-date in terms of spread to EUR mid-swaps and spread to the Bund curve is an exceptional result and once more demonstrates the World Bank’s unique appeal across all markets,” said Paul Eustace, Managing Director, Head of European Syndicate, TD Securities.