IBRD Launches New SEK COVID19 Bond

on

Stockholm (NordSIP) – On April 16th, the IBRD issued a new three-year Sustainable Development Bond (SDB) denominated in Swedish krona. The SEK11.5 billion transaction is part of the World Bank’s effort to raise awareness about the institution’s health program, particularly the World Bank’s efforts to prevent, detect, and respond to the rapid spread of COVID-19.

“We are very happy to see the continued, strong support of investors globally for the World Bank’s development initiatives, including our response to COVID-19. We appreciate the steadfast support of Scandinavian investors for the World Bank’s sustainable development mission and particularly at a time when we are mobilizing financing to help member countries strengthen health systems and support their economies,” said Jingdong Hua, Vice President and Treasurer, World Bank.

- Promotion -

The bond pays a 0.25% coupon and was priced at a 99.976 discount to yield 0.259%. The demand came from Europe, particularly from Scandinavia. Sectorally, asset managers, pension funds, and insurance funds represented 91.3% of the investors, leaving the rest to corporates (6.1%) and central bank and official institutions (2.6%). Folksam, PKA and Swedbank Robur participated in this transaction.

“We would like to express our appreciation of IBRD and their initiative to ease the economic and social consequences of the pandemic that we are now experiencing. It feels very good to be able to make an investment that supports sustainable development projects including the fight against the negative consequences of the pandemic given our vision that our customers should feel secure in a sustainable world,” said Ylva Wessén, CEO of the Folksam Group.

“As a pension fund with members mainly working in social services and health care, we appreciate the opportunity to combine a good risk-adjusted-return with a possibility to contribute to sustainable development including health care in developing countries,” said Michael Nellemann Pedersen, Chief Investment Officer, PKA.

“The spread of COVID-19 and its effects are currently creating great concerns for global health, but also for the economy. To be able to participate in the financing of sustainable development projects including those to fight against global diseases in this situation is very important and fully in line with Swedbank Robur’s vision of being a world leader in social and sustainable value creation,” said Sofia Holma, Manager, Swedbank Robur.

SEB was the sole lead manager on this transaction. “For SEB it is a privilege to be capable of assisting our clients, both the World Bank and investors, in raising capital to address global challenges during the time of COVID-19 – to have institutions like the World Bank with expertise to mitigate risk and operate locally, and clients who combine their financial mandate with ways of reducing global risks is fortunate. It makes every single SEB employee proud to be a part of it,” said Christopher Flensborg, Head of Climate and Sustainable Finance, SEB.

Image by Konstantin Kolosov from Pixabay

Partner content

As climate change rises up the political agenda throughout the West and beyond, shareholders have an important role to play in limiting global fossil fuel consumption by pressuring oil companies to amend their strategies, argues Sora Utzinger.

NordSIP Insights

Most read this week

Rebeca Coriat Joins Lombard Odier

Stockholm (NordSIP) - On the occasion of her appointment as Head of Stewardship at Lombard Odier Investment Managers, NordSIP took the opportunity to catch...