World Bank issues first UN sustainable development bond
Friday, March 10, 2017
The World Bank has raised its first bond linked to the United Nations’ Sustainable Development Goals as it looks to help a global effort to end poverty, tackle climate change and promote equality.
The returns on the €163m two-tranche issue led by BNP Paribas are linked to an index of 50 companies that have been identified as making a significant contribution to the advancement of the UN’s sustainable development agenda.
The agenda was adopted by UN member states in late 2015 and includes 17 separate Sustainable Development Goals (SDGs), ranging from an end to poverty, access to clean water, gender equality and climate action.
A €106.8m 15-year tranche sees all returns delivered at maturity to reflect index performance from the initial level to an average over years 10 and 15. The €56.8m 20-year part pays a fixed 1.2% coupon for the first 10 years, with the remaining 10 years paid out via a coupon reflecting the best performance of the index between years five and 10 over an average of the preceding five years.