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WB Successfully Prices Oversubscribed Landmark, September 2, 2016 Adjust font size:

The World Bank (International Bank for Reconstruction and Development, IBRD) priced the very first Special Drawing Rights (“SDR”)-denominated bond in the PRC National Interbank Bond Market (the “Interbank Market”). The International Bank for Reconstruction and Development 2016 SDR Denominated Bonds (Series 1) (the “SDR Denominated Bond”) raised SDR 500 million (approximately equivalent to USD 700 million), have a maturity of 3 years and a coupon of 0.49% per annum. All payments will be made in Chinese renminbi (RMB).

The SDR Denominated Bonds were issued under the World Bank’s new SDR Denominated Issuance Program that was approved on August 12, 2016, by the People’s Bank of China (PBOC), with a total size of SDR 2 billion (approximately equivalent to USD 2.8 billion).

The joint lead managers for the SDR Denominated Bonds in the Interbank Market are Industrial and Commercial Bank of China Limited, HSBC Bank (China) Company Limited, China Construction Bank Corporation and China Development Bank Corporation. The bonds were 2.5 times oversubscribed with around 50 orders from bank treasuries (53%), central banks and official institutions (29%), securities companies and asset managers (12%), and insurance companies (6%).

“We are honored to support China in its efforts to internationalize its capital and currency markets through the launching of an SDR bond issue and the new Mulan market,” said Arunma Oteh, World Bank Vice President and Treasurer. “It is truly a pleasure for the World Bank to be the first to offer investors an opportunity to participate in this innovative investment product that supports sustainable development worldwide. We are grateful for the excellent collaboration with the Chinese authorities and financial partners.”

Transaction Summary:


World Bank
(International Bank for Reconstruction and Development, IBRD)

Issuer rating:



3 years

Offering period:

August 31, 2016 to September 2, 2016


500 million SDRs

Settlement date:

September 2, 2016


0.49% per annum

Coupon payment dates:

Paid annually on September 2 of each year, in Chinese Renminbi

Maturity date:

September 2, 2019, payments made in Chinese Renminbi

Issue price:


Issue yield:


Settlement, clearing and custodian:

Interbank Market Clearing House Co., Ltd (also known as the “Shanghai Clearing House”)


People's Republic of China law

Lead bookrunner:

Industrial and Commercial Bank of China, Ltd.


HSBC Bank (China) Company Limited

Joint lead underwriters:

China Construction Bank Corporation and China Development Bank Corporation

Syndicate group members:

Agricultural Bank of China Limited, Bank of China Limited, Bank of Communications Co., Ltd., China Merchants Bank Co., Ltd., The Export-Import Bank of China, Bank of Ningbo Company Limited, Bank Of Hangzhou Co., Ltd., China International Capital Corporation Limited, CITIC Securities Company Limited, Donghai Securities Co., Ltd., Bank of Tokyo-Mitsubishi UFJ (China), Ltd. and Citibank (China) Co., Ltd.

Joint lead manager quotes:

“We really appreciate that IBRD trusts the Industrial & Commercial Bank of China (ICBC) and appointed ICBC as the lead bookrunner for this landmark transaction. The IBRD 2016 SDR denominated bond is the first ever publicly issued SDR bond worldwide and it is also the first bond for the World Bank in the China onshore interbank market. ICBC has played a key role in the success of this historical issuance. In the future, ICBC expects to assist more foreign issuers to fund in the Panda and Mulan Market,” said Hu Hao, Vice President, ICBC.

“We are delighted to have worked closely with the World Bank to arrange this SDR bond and bring further developments to the RMB financing market. The success of the transaction provides a strong signal of investor appetite for new structures and diversification. As China further opens up its capital markets to international investors, HSBC continues to bring innovation to clients wishing to access the Chinese market,” said Alexi Chan, Global Co-Head, Debt Capital Markets, HSBC.

“We warmly congratulate the successful launch of the World Bank’s SDR bonds in China’s interbank market, which opens up a whole new era for China’s debt capital market. China Construction Bank (CCB) is deeply honored to facilitate this deal and contribute to make it happen. We will take this opportunity to increase our engagement with the World Bank and other international organizations to broaden our cooperation in a more comprehensive way,” said Yu Jingbo, Vice President of CCB.

“China Development Bank (CDB) has made tremendous efforts for the successful issuance of the very first SDR-denominated bond in the China interbank market. We are pleased to see that the SDR bonds are issued in China's fast-growing and more open bond market. As one of the joint lead managers for the SDR bond, CDB stands ready to deepen the cooperation with the World Bank in contributing to development finance and global recovery. In the meantime, we remain committed to expanding the use of SDRs and promoting the RMB internationalization," said Zhang Xuguang, Executive Vice President of CDB.

The law firm of King & Wood Mallesons (Hong Kong and Beijing) acted as counsel for the World Bank on the bond issue.

SDRs (Special Drawing Rights) are an international reserve asset created by the International Monetary Fund (IMF) in 1969 to supplement its member countries' official reserves. The value of the SDR is currently based on four major currencies: the U.S. dollar, euro, Japanese yen and British pound. The Chinese renminbi will join the SDR basket of reserve currencies on October 1, 2016.

The World Bank (IBRD) raises USD 50-60 billion in the international capital markets each year, by offering investors a variety of products in over 20 currencies. The new SDR program in China is part of the World Bank’s strategy to open and support the development of new markets and will expand World Bank’s product offerings, attracting new domestic and international investors to World Bank bonds.