The World Bank has successfully issued the first digital bond in Swiss Francs (CHF) by an international entity, with a total value of CHF 200 million. This seven-year bond, the largest CHF issuance by the World Bank since 2009, utilises Distributed Ledger Technology (DLT) and will settle using the Swiss National Bank’s (SNB) wholesale Central Bank Digital Currency (wCBDC). The issuance aims to advance the digitalisation of capital markets while supporting the World Bank’s sustainable development initiatives.
In partnership with the SNB and SIX Digital Exchange (SDX), the World Bank has incorporated DLT in this issuance, marking a significant milestone in the integration of digital technology in capital markets. The bond’s coupon and redemption payments will be managed using tokenised CHF on the SDX platform, which interfaces with traditional settlement systems such as Euroclear and Clearstream via SIX SIS. This connectivity allows investors to hold the digital bond through their conventional custodians. The bond issuance is listed on both the SDX and the traditional SIX Swiss Exchange, and is governed by Swiss law.
The bond was predominantly placed within Switzerland, with allocations as follows: banks, bank treasuries, and corporates (60%), asset managers, insurance companies, and pension funds (39%), and the remaining share to central banks and official institutions.
Jorge Familiar, Vice President and Treasurer of the World Bank, stated, “We are grateful for the opportunity to issue the first CHF digital bond as an international issuer. This achievement marks another significant step in the World Bank’s commitment to increasing capital markets’ efficiency through digitalisation in partnership with central banks and central securities depositories.”
David Newns, Head of SIX Digital Exchange, remarked, “Being able to settle wholesale transactions in tokenised central bank money is a critical, foundational requirement for the adoption of a blockchain-based capital markets infrastructure. Today, the World Bank takes the industry one step forward.”
Commerzbank acted as the sole lead manager and as the paying and issuing agent for this transaction. Marie-Claire Ouziel, Global Head of Bonds at Commerzbank, commended the World Bank team, highlighting the partnership among the World Bank, SNB, SDX, and Commerzbank as a key driver of this pioneering success.
Transaction Summary
- Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
- Issuer Rating: Aaa/AAA (Moody’s/S&P)
- Amount: CHF 200 million
- Settlement Date: June 11, 2024
- Maturity Date: June 11, 2031
- Issue Price: 100%
- Issue Yield: 1.1575% p.a.
- Denomination: CHF 5,000
- Coupon: 1.1575% p.a.
- Listing: SDX Trading AG / SIX Swiss Exchange
- ISIN: CH1353258168
- Clearing System: SIX Digital Exchange AG
- Dealer: Commerzbank
