Last Tuesday, the World Bank (International Bank for Reconstruction and Development, IBRD) issued USD 2.5 billion bonds for Sustainable Development that will mature in July 2026. Many investors were drawn towards this initiative, with more than 70 orders and order book value reaching the USD 3.1 Billion mark. While Central banks of the Asian markets were the highest takers with a volume of 45%, European and American corporations and treasuries made up 38% and 17% of the total investment volume, respectively.
Nomura, J.P. Morgan, BofA Securities, and CitiGroup are the lead managers to carry out the transaction, and the bond was listed on Luxembourg Stock Exchange. The bond issue witnessed the entry of investors whose investment policies focus on creating positive change through sustainable operability. The majority of investors are working towards the Eco-governance sector with the primary goal of sustainable development.
Despite the tight market situation due to the on-going Covid-19 pandemic, the bond is expected to yield 0.963% on an annual basis, and the prices are set at a spread of +13.55 base points versus the U.S. Treasury reference price.
The transaction managers were elated by the positive response on the issue and expected long-term benefits for social upliftment. JP Morgan has pledged its net proceeds to achieve World Bank’s twin goals of removing poverty and promoting shared prosperity. Citi and Nomura, too, had returned to assist the world bank in carrying out the transaction. At the same time, BofA securities expressed positive support to World Bank on achieving a milestone even in the dwindling market conditions due to the on-going Covid-19 pandemic.