World Bank Sustainable Bond
The World Bank has issued a record number of sustainable bonds in a week, with different currencies including US dollars, British pounds, Canadian dollars, and Australian dollars.
As an important participant in the sovereign, supranational and agency (SSA) market, the sustainable bonds issued by the World Bank are regarded as high-quality credit assets and have been widely subscribed by institutional investors.
Related Post: Introduction to the World Bank Sovereign ESG Database
World Bank Sustainable Bond Framework
The World Bank’s sustainable bonds mainly provide funds for projects that achieve the United Nations Sustainable Development Goals (SDGs). Its bond framework is consistent with the Sustainable Bond Principles issued by the International Capital Market Association (ICMA). The sustainable bond framework mainly includes four elements: fund proceeds, operational processes, fund management and reporting.
Investments in the World Bank’s sustainable bonds need to be consistent with the dual goals of eradicating poverty and promoting prosperity, where investment projects are divided into social projects and green projects and should achieve positive social and environmental impacts. The World Bank has also developed a negative screening list and stopped financing support for some businesses. For example, the World Bank stopped financing coal-fired power plants after 2010, and the World Bank stopped financing the oil and gas sector in 2019. The World Bank will continue to provide technical assistance and help these sectors implement just transitions.
World Bank’s $5 billion Seven-year Sustainable Bond
The World Bank issued a US$5 billion seven-year sustainable bond (ISIN: US459058LA95), aiming to promote global sustainable development and achieve positive social and environmental impacts. This is also the largest subscription for a seven-year bond from the World Bank and the first US dollar bond in the SSA market this year. The bond will pay an annual coupon rate of 4%, with a spread of 16.7 basis points over the reference treasury bond.
This bond receives a total of more than 11 billion US dollars in subscriptions, of which 49% comes from commercial banks, 35% from the central bank, and 16% from asset management companies. Investors are mainly located in Europe (56%) and the Americas (26%). The bonds will be listed on the Luxembourg Stock Exchange.
World Bank £1.5 billion Five-year Sustainable Bond
The World Bank issued a £1.5 billion five-year sustainable bond (ISIN: XS2744831210), the largest sterling bond in the SSA market since 2022. The bond pays an annual coupon rate of 3.875%, with a spread of 31 basis points over the reference treasury bond.
Investors in this bond are mainly central banks (53%), commercial banks (25%) and asset management companies (22%). Investors are mainly located in the UK (59%) and Asia (32%). The bonds will be listed on the Luxembourg Stock Exchange.
World Bank C$1.4 billion Five-year Sustainable Bond
The World Bank issued a C$1.4 billion five-year sustainable bond (ISIN: CA459058LB70) to finance sustainable development projects, programs, and activities. The bond pays an annual coupon rate of 3.5%, with a spread of 33 basis points over the reference treasury bond.
Investors are mainly central banks (55%), commercial banks (34%) and asset management companies (11%). Investors are mainly located in the Americas (48%) and Asia (34%). The bonds will be listed on the Luxembourg Stock Exchange.
World Bank A$2 billion Five-year Sustainable Bond
The World Bank issued a $2 billion five-year sustainable bond (ISIN: AU3CB0305803), the largest Australian dollar bond ever issued in the SSA market. The bond pays an annual coupon rate of 4.3%, with a spread of 60 basis points over the reference Treasury bond.
Investors are mainly commercial banks (38%), central banks (37%) and asset management companies (25%). Investors are mainly located in Asia (56%) and Australia (22%). The bonds will be listed on the Luxembourg Stock Exchange.
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