World Bank Canadian Dollar Benchmark Bond Highlights Benefits of Investing in Women and Young People

The World Bank raised CAD 1 billion from institutional investors for its Sustainable Development Bond. This Sustainable Development Bond format helps the World Bank achieve its Sustainable Development Goals while gaining costs effective funding.

Source: World Bank

The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) launched a Sustainable Development Bond to raise awareness for the significant and long-lasting benefits of investing in the health and nutrition of women, adolescents and children. The five-year benchmark bond raised CAD1 billion from institutional investors. This is the World Bank’s second benchmark bond in the Canadian dollar market this year.

The vast majority of the bond was placed with domestic Canadian investors. This is the largest SSA issuance in the Canadian dollar market since the World Bank issued a benchmark bond in January that raised CAD1 billion while highlighting gender equality and women’s empowerment.

BMO Capital Markets, Scotiabank and TD Securities were joint lead managers for this transaction.

This Sustainable Development Bond is issued as part of a World Bank initiative to engage investors on the importance of investing in the health and nutrition of women, children and adolescents, and demonstrates how private sector investment can support development financing. Since the initiative was launched in June, the World Bank has raised nearly US$1 billion from institutional and retail investors in Europe and Japan who are focused on these issues.

World Bank Treasurer Arunma Oteh said: “We are extremely pleased with the success of our second benchmark issuance in the Canadian dollar market in 2018. The strong investor response reflects growing demand for safe, liquid bonds that connect with social purpose. We appreciate the excellent support we receive from investors as we continue to raise awareness about the importance of investing in women and young people. By working together, we can ensure a better future for all.”’

The World Bank issues between US$50-US$60 billion annually in bonds for sustainable development. The Sustainable Development Bond format allows the World Bank to obtain cost effective funding while simultaneously engaging with investors and market participants to raise awareness for a specific development challenge, linking it to the Sustainable Development Goals and highlighting the entire developmental mandate of the World Bank.”This transaction offers an important sustainable development dimension which CMHC is proud to support,” said Louise Stevens, Treasurer at Canada Mortgage and Housing Corporation (CMHC).

“Manulife Asset Management invests in World Bank Sustainable Development Bonds because they are safe, liquid products that offer attractive returns for our clients—while also supporting positive social impact,” said Hosen Marjaee, Senior Managing Director, Canadian Fixed Income, Manulife Asset Management. “With this latest bond, we are helping the World Bank to raise awareness for the critical importance of investing in women and children.”

Randall Malcolm, Managing Director at Sun Life said: “Sun Life was eager to participate in the newest sustainable development bond issued by the IBRD, as the bond’s focus on funding health and nutrition initiatives aligns well with Sun Life’s vision for healthier communities for life.”

Ensuring healthy lives and promoting well-being for world citizens at all ages is one of the 17 Sustainable Development Goals. The Government of Canada has been supporting the empowerment and well-being of women, children and adolescents, including through support to the Global Financing Facility (GFF)—a multi-stakeholder partnership hosted by the World Bank which is helping countries significantly increase investments in the health and nutrition of their people.

Joint Lead Manager Quotes

Kelsey Gunderson, Head of Global Trading Products at BMO Capital Markets said: “BMO is excited to partner with the World Bank once again connecting investors with investment opportunities to achieve positive development outcomes. This particular bond raises awareness for health and nutrition of women, children and adolescents in pursuit of building a more prosperous future. A testament to World Bank’s outreach and education towards sustainable development goals, the transaction achieved notable placement within the Canadian socially responsible investment community.”

Cesare Roselli, Global Head of Supranational, Sovereign and Agency Origination at Scotiabank: “With this transaction, IBRD confirmed its standing as a regular, liquid issuer in the CAD market.  The sustainable development dimension of the issue contributed to attract a wide array of domestic investors, thus resulting in an exceptional-quality orderbook.”

Amy West, Head of Sustainable Finance at TD Securities: “An outstanding result as World Bank has once again taken a leadership role in developing the sustainable capital markets. As the sustainable market continues to grow beyond solely green bonds, World Bank continues to make strides with the first-ever Sustainable Development benchmark bond in the Canadian dollar market to support healthcare and nutrition.”