World Bank issues 3-year sustainable development bond to combat malnutrition

24 / 01 / 2022

By Marwa Nassar - -

The World Bank issued a 3-year, 100 million Peruvian sol-denominated Sustainable Development Bond due January 2025 while engaging with investors on the importance of good nutrition to build human capital.

Western Asset Management Company was the sole investor in the transaction on behalf of client assets. Bank of America Securities was the underwriter of the transaction.

World Bank bonds support the financing of sustainable development projects and programs in member countries across a range of sectors in line with its mission to end extreme poverty and promote shared prosperity.

This includes $6 billion in projects, of which $1.5 billion are in IBRD countries, helping to improve nutrition. Good nutrition is critical to improving human capital — a central driver of sustainable growth and poverty reduction. However, COVID-19 and other shocks are expected to have pushed 155 million people into acute food insecurity, with 28 million at risk of famine.

Millions of children will also fall into malnutrition due to pandemic related service disruptions and not achieve their full growth potential. There is an urgent need to ensure that everyone has access to the knowledge, resources, and services needed to achieve optimal nutrition.

Heike Reichelt, Head of Investor Relations and Sustainable Finance, said, “The World Bank works with its member countries to help them achieve their development goals. Combatting malnutrition in its various forms is central to building a sustainable future and recognized in Sustainable Development Goal (SDG) 2, which aims to end hunger, achieve food security and improved nutrition, and promote sustainable agriculture. As the situation continues to worsen during COVID, we especially value investor efforts to raise awareness for the nutrition crisis and thank Western Asset Management Company for their investment and support of the World Bank’s sustainable development activities.”

Kevin Ritter, Portfolio Manager, Western Asset, said, “We are excited to partner with the World Bank on this opportunity. We find attractive the income profile and potential total return of the Peruvian sol-denominated issuance. Additionally, effective human capital development is an important input in our sovereign ESG framework, given its material impact on the sustainability of economic growth over the medium and long term. Through its support of all SDGs, including human capital development across member countries—via nutrition programs targeting SDG2 (“Zero Hunger”)—the World Bank’s Sustainable Bond Program provides investors with a unique opportunity to support the financing of sustainability-enhancing development programs, which we believe at the same time can enable our clients to meet their investment objectives.”