The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a USD 1 billion 4-year benchmark bond linked to the Secured Overnight Financing Rate (SOFR) index. The bond matures on June 17, 2024.
A strong order book, led by demand from bank treasuries, allowed for a tightening from initial guidance of SOFR +40 area to SOFR +39 at printing. Joint lead managers for this transaction are BMO Capital Markets and Wells Fargo Securities.
This transaction responds to investor demand for high quality assets and helps develop the market for SOFR – a broad measure of the cost of borrowing cash overnight collateralized by the U.S. Treasury securities and an alternative reference rate to USD LIBOR. This was the World Bank’s first-ever transaction using the SOFR Index published by the Federal Reserve Bank of New York and the third transaction for which the World Bank has referenced SOFR.
Andrea Dore, Head of Funding, World Bank Treasury said: “The World Bank has an important role to play in developing and deepening markets. We are very pleased to take another step to help develop the SOFR market and continue to provide options for investors”.
Sean Hayes, Managing Director & Head of US Syndicate said: “World Bank continues its leadership role in facilitating LIBOR replacement for floating rate debt securities. As a successful SOFR index-linked $1bn 4-year bond, this transaction re-opens the SSA SOFR primary market, and stands the longest dated SOFR bond referenced versus the index. With each transaction, World Bank attracts first-time investors of SOFR notes, a testament to its commitment to developing new markets”.
Carlos Perezgrovas, Head of SSA Origination, Wells Fargo Securities said: “Another successful FRN benchmark transaction for the World Bank in the constantly evolving SOFR space. This issue, the first new SOFR index-linked issue for the borrower, is evidence of the World Bank’s efforts to support the development of standards and liquidity in the market. As usual for such a well-established name, the transaction was strongly received by a diverse and top-quality investor base”.
Europe, Middle East, Africa
By Investor Type
Central Banks/Official Institutions
International Bank for Reconstruction and Development (Ticker IBRD)
Aaa / AAA (Moody’s/S&P)
16 June 2020
17 June 2024
Compounded SOFR + 39 bps
Calculated on the basis of the evolution of the value of the SOFR Index from the SOFR IndexStart