World Bank Prices 1 Billion 7-Year New Zealand Dollar Benchmark

The World Bank (International Bank for Reconstruction and Development, IBRD rated Aaa/AAA) has priced a NZD 1 billion 1.625% fixed-rate global bond due May 10, 2028. The NZD bond was launched with an initial minimum target size of NZD 300 million and was increased due to very strong investor demand. The size of this bond matches the largest Supranational, Sovereign and Agency (SSA) bond issued last year, which was a 5-year NZD bond issued by the World Bank.

The bonds were distributed to a broad range of institutional investors in New Zealand (87%), Europe (8%), and Asia (5%). More than 20 investors participated including commercial banks and asset managers. The deal priced at 99.625077% to yield 1.682% p.a. semi-annual. This equates to a spread of 44.2 basis points over the New Zealand Government Bond due May 2028.

The lead managers for the transaction are Australia and New Zealand Banking Group Limited (ANZ), Bank of New Zealand (BNZ), and Commonwealth Bank of Australia (CBA).

“We are extremely grateful for the strong support from Kauri investors helping us print the largest New Zealand dollar bond of its kind by an SSA issuer,” said Jingdong Hua, Vice President and Treasurer, World Bank. “Funding from the capital markets supports our member countries’ sustainable development goals including efforts to implement a green, resilient and inclusive recovery to the coronavirus pandemic.”

Investor Distribution

Lead Manager Quotes

“Congratulations to the World Bank for another outstanding Kauri bond transaction, matching their own tranche size record for the market and setting a new benchmark for a 7-year offering. It was a well-timed deal, welcomed by the broad investor base that World Bank attracts in the New Zealand dollar market,” said Glen Sorensen, Director Syndicate, ANZ.

“The World Bank has continued their outstanding track record in 2020 of Kauri issuance to follow suit with another outstanding transaction in 2021. In achieving a second consecutive billion dollar Kauri transaction within six months, we have seen both the demand that the market has for high grade NZ paper at present, and the high regard that investors have for the World Bank as an issuer,” said Mike Faville, Head of Capital Markets, BNZ.

“This outcome reflects the World Bank’s long-term commitment to a variety of benchmark markets and the appreciation New Zealand and Australian dollar investors have for the key role the World Bank plays in the pursuit of sustainable development across the globe,” said Anthony Hermann, Executive General Manager Global Markets, CBA.

Transaction Summary

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