World Bank Launches Bonds to Highlight the Challenge of Plastic Waste in Oceans

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The World Bank launched a Sustainable Development Bond to draw attention to the challenge of plastic waste pollution in oceans. This bond is part of an ongoing initiative by the World Bank to engage with investors on highlighting the vital role of fresh and saltwater resources.

The fixed rate bond, which was targeted at both institutional and individual investors, priced on April 2, 2019 and raised US$10,000,000. Morgan Stanley & Co. LLC. was the sole distributor of the bond. 

“Freshwater and marine ecosystems cover more than three-quarters of the earth’s surface and provide critical services—from habitats and drinking water to climate control. As the biggest multilateral funder for ocean and water projects in developing countries, the World Bank is committed to working with investors as we highlight the critical need to support the sustainable use of ocean and marine resources—including through better waste management. We greatly appreciate the partnership with the diverse range of investors that continue to support bonds issued under this theme,” said George Richardson, World Bank Director for Capital Markets.

“The World Bank continues to be a leader when it comes to financing impact, and the systemic challenge of plastic waste in the oceans requires institutions like the World Bank to raise awareness and facilitate solutions,” said Audrey Choi, Morgan Stanley Chief Sustainability Officer and CEO of the Morgan Stanley Institute for Sustainable Investing.

With annual issuances between US$40-US$50 billion, all World Bank bonds support the financing of programs that support the Sustainable Development Goals. This bond brings issuances under the theme to more than US$990 million (equivalent) raised through 19 bonds issued in nine currencies. Investors all voiced strong support for the strategic focus on SDG 14 (Life Below Water) and SDG 6 (Clean Water & Sanitation).

According to Scientific American, eight million tons of plastics are dumped in the ocean each year – that is about one truck of garbage per minute. In addition to the environmental damage, the financial toll is huge. Marine ecosystems globally suffer an estimated US$13 billion a year in damages caused by plastic waste impacting tourism, fishing, shipping, health and food chains.

The World Bank will continue to issue bonds under the initiative.

Transaction Summary*
Issuer World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer Rating Aaa/AAA
Amount US$10 million
Settlement Date April 24, 2019
Maturity Date April 24, 2022
Issue Price 100%
Coupon (per annum) Step Up Schedule:
Year 1: 2.35%
Year 2: 2.70%
Year 3: 3.15%
Interest Payment Dates April 24 and October 24 of each year, from and including October 24, 2019 to and including the Maturity Date (unless called earlier)
Call Dates April 24 and October 24 of each year, from and including April 24, 2020 to and including October 24, 2021
Denomination US$1,000 and integral multiples of US$1,000 in excess thereof
Clearing System DTC
Lead Manager Morgan Stanley & Co. LLC

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