Joint leads JP Morgan and Morgan Stanley launched the deal as a minimum of $500m but increased it to $750m on the back of a $1.1bn book.
Doris Herrera-Pol, head of the World Bank's capital market operations, described the deal as a once in a decade opportunity.
“This is a special deal for us,” she said. “It took more than a decade to again see a confluence of factors making a long global bond proposal one that we were able to entertain. For the first time in many years we were able to offer a 30 year where there would be demand from many parts of the world.”
A key objective of the issue was to broaden the World Bank's investor base. The main supra/sovereign bond buyers in recent years have been the Asian central banks.
The target audience here was money managers, life insurance companies and pension funds, mainly in the US, although there was also strong interest from Europe (35%) and Asia (15%).
While several accounts involved bought the issue for their interest rate portfolios, most US demand was from investors who normally buy credit product and were seeking to diversify out of super-tight credit into high quality triple-A alternatives.
Fund managers took 40% of the bonds, pension funds and life companies 25%, banks and retail intermediaries 20% and central banks and official institutions 15%.
That the World Bank was able to sell 50% of its bond in the US is remarkable, since it was priced some 20p through US agencies and 50bp or more through triple-A corporate bonds.
Fannie Mae's November 2030s, for example, were bid at around Libor plus 4.5bp and the Freddie Mac July 2032s at plus 0.5bp. The World Bank priced at Treasuries plus 22bp, equivalent to Libor less 16bp.
The issue is slightly more expensive than the World Bank's 10 year funding of about minus 28bp, but it has captured longer duration.
One market observer questioned why the borrower would pay so much more to raise 30 year funds in the public market when it issue 30 year structured product at 30bp or 35bp through Libor.
Some eyebrows were raised at the timing, just before the Federal Open Market Committee meeting on Wednesday.
But John Lee-Tin, vice president at JP Morgan in London, said: “No-one expected any surprises from the Fed and, as it turned out, it is a slower issuance week so the bank has had an even greater opportunity to get a lot of spotlight attention.
“The only thing on the radar screen is the non-farm payroll figure on Friday but it was not really a concern.”
For the issuer, part of the appeal was that long yields are still low by historical standards. Anneke de Boer, head of frequent borrower origination at Morgan Stanley in London, even claimed the issue had the lowest ever yield for a 30 year benchmark offering by any borrower in history, including the US Treasury.
“This is a remarkable feat that reflects the quality of the World Bank name in the capital markets,” she said.
Several bankers were disappointed that the deal could not be increased to $1bn to establish a “proper” benchmark.
However, Herrera-Pol said the World Bank was not size-hungry: “If we can offer a smaller bond while satisfying investor demand and expectations in terms of liquidity and performance, that is fine for us.”
But the bank may well issue another global bond if the opportunity arises. Its funding requirement this year is $12bn-$15bn and, according to Herrera-Pol, halfway through its fiscal year, borrowing is on target. “However, if we were to see opportunities that presented the same high strategic value,” she said, “we might go ahead, regardless of the fiscal year.”