World Bank Prices Tap of Ten-Year SOFR Index Linked Bond

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) has raised an additional USD 900 million for its February 2031 bond referencing the Secured Overnight Financing Rate (SOFR) Index, bringing the new outstanding amount to USD 1.5 billion. The first tranche of this SOFR index transaction was issued in February 2021 and with this tap it becomes the market’s largest bond in the ten-year sector that references SOFR.

This reopening responds to investor demand for high quality assets and reflects IBRD’s commitment to bolster the floating rate market linked to SOFR. SOFR is a rate based on transactions in the U.S. Treasury repurchase market and an alternative reference rate to USD LIBOR.

The bond matures on February 11, 2031 and pays a coupon of Compounded SOFR + 37 basis points (resetting daily and paid quarterly). Citi, Credit Agricole and Wells Fargo Securities were the joint lead managers of the transaction.

“We are extremely pleased that the World Bank could add liquidity to the market by tapping an existing bond. This gives investors another opportunity to gain access to the long end of the SOFR curve,” said Jingdong Hua, Vice President and Treasurer, World Bank.”At now US 1.5 billion, this SOFR bond is the largest available at the 10-year part of the yield curve and helps advance the development of the SOFR market.”

Investor Distribution

By Geography

By Investor Type

Americas

76%

Banks/Bank Treasuries

72%

EMEA

21%

Asset Managers

28%

Asia

3%

Transaction Summary

Issuer:

World Bank

(International Bank for Reconstruction and Development, IBRD)

Issuer rating:

Aaa /AAA

Tenor:

10-year

Notional amount (after tap):

USD 1.5 billion

Reoffer price:

100.285%

Settlement date:

July 29, 2021

Maturity date:

February 11, 2031

Coupon:

Compounded SOFR + 37bps

Compounded SOFR:

Calculated on the basis of the evolution of the value of the SOFR Index from the SOFR IndexStart

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