At WASHINGTON, on December 14th, 2022, the World Bank (International Bank for Reconstruction and Development, IBRD, AAA/Aaa) issued an UYU 850 million (USDeq. 22 million) 3-year Sustainable Development Bond due December 2025. This transaction is part of the World Bank’s effort to issue Sustainable Development Bonds while engaging with investors to highlight the importance of education in reducing poverty and improving health, gender equality, peace, and stability. Western Asset Management Company was the sole investor in the transaction on behalf of client assets. BofA Securities was the underwriter of the transaction.
The World Bank is the largest source of external financing for education in developing countries. World Bank support to countries covers the entire learning cycle to support resilient, equitable, and inclusive education systems that ensure learning happens for everyone. This includes a goal to halve Learning Poverty, the share of 10-year-old children around the world who cannot read and understand a simple text by 2030, by helping countries build foundational skills including literacy, numeracy, and socio-emotional skills – the building blocks for all other learning. In fiscal years 2021-2022, IBRD committed US$3 billion to support the financing of education programs, technical assistance, and other projects.
Heike Reichelt, Head of Investor Relations and Sustainable Finance, World Bank Treasury, said “Learning Poverty affects more than two-thirds of children today. Addressing this crisis is central to the World Bank’s work with member countries to improve foundational learning for all children. We appreciate the opportunity to engage with investors to highlight the importance of education for development, and how the World Bank is supporting member countries.”
Kevin Zhang, Research Analyst, Western Asset, said, “We are excited to collaborate with the World Bank on this opportunity. The income profile and return potential of the Uruguayan peso-denominated issuance is attractive. Additionally, the World Bank’s Sustainable Bond Program provides investors with a unique opportunity to finance work that seeks to make progress toward the UN Sustainable Development Goals. The Bank’s work in support of quality education and reducing inequalities can contribute to sustainable growth and poverty reduction across its member countries, while at the same time enabling specific clients to meet their investment objectives.”
The World Bank issues Sustainable Development Bonds in the international capital markets to support the financing of sustainable development activities designed to achieve positive social and environmental impacts in developing countries, while raising awareness of specific development themes across a range of sectors. The transaction is highlighting SDG 4, Quality Education. This bond was issued under the World Bank’s Sustainable Development Bond Framework.