Case study

World Bank issues first Euro 15yr bond for Supranationals and Agencies in 2023

11 Apr 2023 . 3 min read

Promoting shared prosperity in a sustainable way

Created in 1944, the World Bank (International Bank for Reconstruction & Development, IBRD), a member of the World Bank Group, operates as a global development co-operative owned by 189 nations. It provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to: support the UN Sustainable Development Goals (SDGs), end extreme poverty, and promote shared prosperity.

The World Bank raises funds – typically $45-50 billion per year – for all its sustainable development activities through World Bank Sustainable Development Bonds. These bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association and as such support the financing of a combination of green and social, i.e. “sustainable development” projects, programmes and activities in IBRD member countries as described in the World Bank Sustainable Development Bond Framework.

A key priority for the World Bank’s engagement with the capital markets is building strategic partnerships with investors to promote the importance of private sector financing in sustainable development. The World Bank’s Sustainable Development Bond Impact Report describes how the World Bank engages with investors on the SDGs and raises awareness for specific development challenges.

Sustainable Development Bond attracts 90 orders from high-quality investors

Looking to issue the first Euro 15-year benchmark for Supranationals and Agencies in 2023, the World Bank asked NatWest to support the issuance in the role of Joint Lead Manager (JLM). This is the same role we performed for the International Development Association – another part of the World Bank Group – in August last year, for a 15-year €2 billion Sustainable Development bond.

The World Bank announced its 15-year €2 billion Sustainability Bond during a busy week for EUR primary issuance, with European and global investors seeking high credit quality and a sustainable investment at the long end of the curve rushing to put in orders, totalling €2.6 billion.

Asset managers, insurance and pension funds dominated the order books, taking 59% of the allocation, followed by treasuries with 28%. Looking at investor origin, French (31%), German (31%) and other European investors (34%) took the majority of the transaction.

Mobilising private capital for sustainable and inclusive development

Jorge Familiar, Vice President and Treasurer, World Bank, commented: “The World Bank raises funds in the capital markets to finance projects that secure sustainable, inclusive, and resilient development in our member countries. This transaction offers European and global investors an opportunity to invest in these activities while at the same time benefitting from a safe and liquid asset for their Euro portfolios. This Sustainable Development Bond is another example of how the World Bank mobilises private capital and the important role the private sector plays in financing development.”

Damien Carde, Managing Director, Head of SSA DCM, NatWest Markets, said: “We congratulate our customer on this exceptional result, with a €2 billion print coming with tight pricing compared with European peers. For NatWest, this issuance reflects our wider commitment and focus on supporting sustainable development, and we are incredibly proud to have been involved.”

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