WASHINGTON, D.C., June 9, 2020 – 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”.
By Investor Type
Europe, Middle East, Africa
Central Banks/Official Institutions
Joint Lead Manager Quotes
Sean Hayes, Managing Director & Head of US Syndicate, BMO Capital Markets 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”.
World Bank (International Bank for Reconstruction and Development, IBRD)
Aaa / AAA (Moody’s/S&P)
June 16, 2020
June 17, 2024
Compounded SOFR + 39 bps
Calculated on the basis of the evolution of the value of the SOFR Index from the SOFR IndexStart value date to, but excluding, the SOFR IndexEnd value date with regard to the relevant interest period
Coupon payment dates:
17th of each March, June, September and December
Fedwire, Euroclear, Clearstream
Luxembourg Stock Exchange
Joined Lead managers:
BMO Capital Markets Corp., Wells Fargo Securities, LLC
This press release is not an offer for sale of securities of the International Bank for Reconstruction and Development ("IBRD"), also known in the capital markets as "World Bank". Any offering of World Bank securities will take place solely on the basis of the relevant offering documentation including, but not limited to, the prospectus, term sheet and/or final terms, as applicable, prepared by the World Bank or on behalf of the World Bank, and is subject to restrictions under the laws of several countries. World Bank securities may not be offered or sold except in compliance with all such laws.
The net proceeds from the sale of World Bank securities are used to finance sustainable development projects and programs in World Bank’s member countries without being committed or earmarked for lending to, or financing of, any particular projects or programs. Returns on World Bank securities are not linked to the performance of any particular project or program.
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 operates as a global development cooperative owned by 189 nations. It provides its members with financing, expertise and coordination services so they can achieve equitable and sustainable economic growth in their national economies and find effective solutions to pressing regional and global economic and environmental problems. The World Bank Group has two main goals: to end extreme poverty and promote shared prosperity. The World Bank (IBRD) seeks to achieve them primarily by providing loans, risk management products, and expertise on development-related disciplines to its borrowing member government clients in middle-income countries and other creditworthy countries, and by coordinating responses to regional and global challenges. The World Bank has been issuing bonds in the international capital markets for over 70 years to fund its sustainable development activities and achieve a positive impact. Information on bonds for investors is available on the World Bank Treasury website: www.worldbank.org/debtsecurities.
Head of Investor Relations and New Products
World Bank Treasury