New Delhi [India], January 4 (ANI): The International Bank for Reconstruction and Development (IBRD), operating under the banner of the World Bank with a stellar Aaa/AAA rating, has commenced the new year on a high note. The institution successfully priced its first benchmark of 2024 – a substantial Australian dollar 2 billion 5-year bond due January 10, 2029.
According to the World Bank, the transaction garnered substantial interest, with over 50 orders totalling more than AUD 2.4 billion.
The response underscores the market’s confidence in IBRD’s high credit quality and aligns with the broader support for the World Bank’s mission.
Noteworthy is the fact that funds raised through World Bank Sustainable Development Bonds contribute to financing green and social projects, programs, and activities in IBRD member countries.
The bond, carrying a fixed interest rate of 4.30 per cent per annum, translates to a spread of +60.4 basis points over the Australian government bond due November 2028. Deutsche Bank, J.P. Morgan, Nomura International plc, and RBC Capital Markets acted as the joint-lead managers for this significant transaction.
Jorge Familiar, Vice President and Treasurer of the World Bank, expressed his satisfaction with the launch, stating, “This transaction was a remarkable launch to our funding program for the new year. The Australian dollar market is important to provide investment opportunities to a broad set of globally diverse investors – a cornerstone of our program which allows a large number of investors to participate and support the institution’s mission to end extreme poverty and boost prosperity on a livable planet.”
The transaction saw robust participation from diverse investor categories and geographies. Approximately 56 per cent of the bonds were distributed in Asia, 22 per cent in Australia, and another 22 per cent in EMEA.
Among investor types, Banks/Bank Treasuries constituted 38 per cent, Central Banks/Official Institutions made up 37 per cent, and Asset Managers/Insurance/Pension Funds accounted for 25 per cent.
Deutsche Bank, one of the joint lead managers, expressed pride in working on this landmark transaction. Craig Johnston, Head of AUD Debt Capital Markets (DCM) Syndicate at Deutsche Bank Sydney, remarked, “A fantastic transaction to kick off the 2024 calendar year with the World Bank issuing an AUD 2 billion new 5-year transaction. The transaction was very well supported by a diverse group of investor jurisdictions and types which highlights the World Bank’s ability to issue across all markets. Deutsche Bank is very proud to have worked on this landmark transaction and we look forward to working together in the future”.
J.P. Morgan, another joint lead manager, commended the World Bank’s record-breaking start to 2024. Sarah Lovedee, Head of Supranational DCM at J.P. Morgan, stated, “Congratulations to the World Bank team for their record-breaking start to 2024 with this new 5-year Sustainable Development Bond. This AUD 2 billion transaction is an incredible result and demonstrates the exceptional investor following that the World Bank team has developed over many years of issuing in the Kangaroo market. The J.P. Morgan team is proud to have worked with the World Bank on their opening transaction for the year,”
“The World Bank has set the tone in global bond markets to start 2024. This transaction marks the first benchmark transaction across all currencies, for all issuers, achieving a record outcome. Achieving a transaction size of AUD 2 billion, the largest AUD Sovereign, Supranational and Agency (SSA) transaction ever recorded, has drawn a collection of new investors to the market overall and helped drive the growth and maturity of the AUD market for offshore issuers. It has been Nomura’s pleasure to continue our partnership with the World Bank in the Kangaroo market,” said Oliver Holt, Head of Debt Syndicate and Origination Asia ex-Japan, Nomura.
“What a way to open the Australian dollar market! Yet again the World Bank is setting the standard for what is possible to achieve in the SSA Kangaroo market. RBC is proud to have acted as a Joint Lead Manager for the World Bank in what is the largest SSA Kangaroo bond on record and would like to congratulate the World Bank for executing an extremely well-placed transaction and paving the way for the sector in 2024,” said Harald Eikeland, Director, Head of APAC Syndicate at RBC Capital Markets.
Nomura and RBC Capital Markets also echoed their pride in contributing to this historic transaction, emphasizing the World Bank’s role in setting new standards in the SSA Kangaroo market. (ANI)
