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PRESS RELEASE February 6, 2020

World Bank Prices USD 1 Billion Tap of August 2024 SOFR Linked Bond

WASHINGTON, DC, February 6, 2020 – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) has raised an additional USD 1 billion for its August 2024 bond referencing the Secured Overnight Financing Rate (SOFR), bringing the new outstanding amount to USD 1.5 billion.  The first tranche of this SOFR transaction was issued in July 2019 and remains the market’s longest ever bond referencing the 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 August 6, 2024 and has a re-offer spread of Compounded Daily SOFR +28 basis points (resetting daily and paid quarterly). BMO Capital Markets, BofA Securities, RBC Capital Markets were the joint lead managers of the transaction.

“We are pleased to continue to contribute to the development of the SOFR market, providing more options to investors. With this tap, we are happy to see broader participation across investor types and regions with over 20 new investors in the book,” said Andrea Dore, Head of Funding, World Bank Treasury.

“A ground-breaking outcome for World Bank’s first SOFR-linked issuance of 2020. This re-opening promotes greater liquidity in what remains the longest outstanding SOFR bond. Issuing beyond the 3-year tenor in $1bn size is a first, and a remarkable development in the early days of SOFR supply. This transaction underscores World Bank’s leadership and innovation in capital markets, and further propels the growth of the SOFR market,” said Sean Hayes, Managing Director and Head of US Syndicate at BMO Capital Markets

“By bringing this SOFR line to a liquid benchmark size, the World Bank continues to demonstrate leadership in the LIBOR transition space. This line is the longest dated SOFR SSA bond and will remain a reference point for the sector as it continues to develop,” said Adrien de Naurois, Managing Director, BofA Securities.

“World Bank’s very successful increase of their SOFR benchmark reinvigorates the quest to build a longer and more liquid curve for LIBOR replacement trades in the USD market,” said Jigme Shingsar, Managing Director, Debt Capital Markets, RBC Capital Markets.

 

Investor Distribution by Investor Type and Region

Region

Investor Type

Europe

49%

Banks/Bank Treasuries

80%

Americas

34%

Asset Managers

18%

Asia

17%

Central Banks/Official Institutions

2%

 

Transaction Summary*

 

Issuer:

World Bank
(International Bank for Reconstruction and Development, IBRD)

Issuer rating:

Aaa /AAA

Issue amount:

USD 1 billion

Notional amount (after tap):

USD 1.5 billion

Re-offer price:

100.087%

Settlement date:

February 14, 2020

Maturity date:

August 6, 2024

Re-offer Spread:

Compounded Daily SOFR + 28 bps, reset on each U.S. Government Securities Business Day, paid quarterly with a 5-day observation lag, Act/360

Floating rate reference:

Compounded Daily, as defined in the final terms, and subject to the fall-back provisions therein

Coupon payment dates:

Paid quarterly on February 6, May 6, August 6, and November 6 of each year, from and including May 6, 2020 to and including the maturity date

Listing:

Luxembourg Stock Exchange

Clearing systems:

Fedwire, Euroclear, Clearstream

ISIN:

US459058HC08

Joint lead managers:

BMO Capital Markets, BofA Securities, RBC Capital Markets

*This press release is not an offer for sale of bonds of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank". Any offering of the bonds will be made only by means of a prospectus containing detailed information that will be made available through the joint lead managers and is subject to restrictions under the laws of several countries. Bonds may not be offered or sold except in compliance with all such laws.

The World Bank issues between USD 50 to USD 60 billion annually in bonds for sustainable development. These range from structured notes to benchmark-sized issuances that support the financing of the World Bank’s sustainable development projects and programs. A key priority for the World Bank’s engagement in the capital markets is to build strategic partnerships with investors and other market participants to raise awareness for development challenges and accelerate opportunities to mobilize finance for development.

About the World Bank

The World Bank (International Bank for Reconstruction and Development, IBRD), rated Aaa/AAA (Moody’s/S&P), is an international organization. Created in 1944, it is the original member of the World Bank Group and operates as a global development cooperative owned by 189 nations. The World Bank provides loans, guarantees, risk management products, and advisory services to middle-income and other creditworthy countries to support the Sustainable Development Goals and to end extreme poverty and promote shared prosperity. It also provides leadership to coordinate regional and global responses to development challenges. The World Bank has been issuing sustainable development bonds in the international capital markets for over 70 years to fund programs and activities that achieve a positive impact. More information on World Bank bonds is available at https://treasury.worldbank.org.

Contact

Heike Reichelt, Head of Investor Relations and New Products

World Bank Treasury

debtsecurities@worldbank.org


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