The World Bank has begun its 2025 funding cycle by successfully launching an AUD 1.75 billion Sustainable Development Bond. The 5-year bond matures on January 10, 2030. It will fund green and social projects in the IBRD’s member countries. Priced at 42 basis points above the Australian government bond due November 2029, the bond offers a fixed annual interest rate of 4.35%, attracting significant interest from a diverse global investor base.
Jorge Familiar, the World Bank Vice President and Treasurer, said he was satisfied with the strong market response. “It is pleasing to start 2025 with another transaction in the Australian dollar market – it’s a great way to begin the World Bank’s funding program for the new year. This benchmark offers global investors the chance to invest in the mission for a livable planet through a high-quality investment,” he said.
The issuance received a strong market reception, gathering orders in excess of AUD 3.1 billion from over 70 investors. This is close to double the targeted issuance amount, indicating very strong demand for sustainable investment opportunities. Proceeds from the bond will be used to finance a range of initiatives, from climate change mitigation and biodiversity conservation to poverty reduction and education enhancement, demonstrating the World Bank’s commitment to advancing global sustainability goals.
The geographical distribution of the investor base is reflective of the truly global nature of the transaction. Asian investors accounted for 42% of demand, while 34% was from Australia, and 24% came from EMEA and the Americas combined. This diversified participation speaks to the World Bank’s ability to generate interest across markets and regions and further reinforces its position as a trusted and influential player in sustainable finance.
Investor diversity went beyond geography, as banks and bank treasuries comprised 48% of the final allocation, while asset managers, insurance companies, and pension funds stood at 33%. The remaining 19% was represented by central banks and official institutions. Such broad interest indicates growing demand from institutional investors for high-quality ESG-themed investments in sustainable development bonds.
The four joint-lead managers of the bond issuance were ANZ, Commonwealth Bank of Australia (CBA), Nomura, and RBC Capital Markets. Each played a pivotal role in ensuring the transaction’s success and praised the strong investor interest.
ANZ’s Director of Debt Syndicate, Brenton Smith, noted that the offering generated broad demand. The AUD 3.1 billion final orderbook reflects the strong and diversified investor base that the World Bank has developed in the Kangaroo market,” he said. Nikolaus Romuld, Head of Bond Syndicate at CBA, also underlined the domestic investor participation. “The transaction attracted diverse investors from domestic and international buyers.”. We were happy to see Australian investors meaningfully engaging in the SSA sector at the beginning of the year, he said.
Harald Eikeland, Head of APAC Syndicate at RBC Capital Markets, commented on the World Bank’s consistent influence in the Australian dollar market, often referred to as the Kangaroo bond market. “The World Bank’s commitment to the Australian dollar market has once again borne fruit,” he said. Meanwhile, Oliver Holt, Head of AeJ DCM and Syndicate, Nomura wrote: “issuance. ground-breaking the SSA issuer enjoys unparalleled support of the market so far, thus breaking the earlier record of high demand for it”.
This successful issuance not only strengthens the World Bank’s position in global sustainable finance but also reaffirms its role in advancing strategic funding initiatives that contribute to a sustainable future. With this bond, the World Bank continues to demonstrate the power of leveraging financial markets to drive positive environmental and social outcomes, reinforcing its mission to create a livable planet for future generations.