WASHINGTON, D.C., September 11, 2020 - The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a USD 1.5 billion 5-year benchmark bond linked to the Secured Overnight Financing Rate (SOFR) index. It is the largest SOFR Index-linked bond issued by a Sovereign, Supranational or Agency (SSA).
More than 30 investors placed orders in excess of USD 1.7 billion. The order book was anchored by bank treasuries and asset managers. Joint lead managers for this transaction were BMO Capital Markets, RBC Capital Markets and Wells Fargo Securities, LLC.
The 5-year benchmark matures on September 18, 2025 and has an interest rate of Compounded SOFR +31 basis points.
“We are very pleased to offer investors a liquid, SOFR Index-linked product from the World Bank - an issuer of the highest credit, that also enables them to achieve a positive social and development impact,” said Jingdong Hua, Vice President and Treasurer, World Bank.“The continued development of robust alternatives to LIBOR helps strengthen the global financial system, and we are grateful for the increasing number of investors joining this growing market.”
By Investor Type
Central Banks/Official Institutions
Joint Lead Manager Quotes
“Pioneering capital markets is simply what the World Bank does best. This outcome represents the largest ever SSA SOFR Floating Rate Note (FRN) new issue, albeit in a long-dated floating rate maturity, which involved new investors. Congratulations to the World Bank Treasury on reaching yet another milestone; BMO is honored to have been a partner,” said Sean Hayes, Head of US Syndicate & Credit Sales, BMO Capital Markets.
“The World Bank reinforced their status as the premier provider of term SOFR product with their latest record-breaking 5-year benchmark. With this transaction the World Bank stands out for its ability to transform longer less liquid parts of the SOFR curve into benchmark markets which will no doubt blaze the trail for others to follow,” said Jigme Shingsar, Managing Director, RBC Capital Markets.
“Congratulations to the World Bank team on achieving the milestone of issuing the largest SOFR FRN new offering by any SSA borrower to date. The high-quality book of over USD 1.7 billion in orders, allowed for a comfortable increase to the USD 1.5 billion final size and a spread tightening to +31 basis points from the original +32 basis points Initial Price Talk (IPT) level. Worth highlighting again the participation of new accounts buying SSA SOFR product for the first time, a recurring theme on each new World Bank trade. Wells Fargo is delighted to have been part of this transaction,” said Carlos Perezgrovas, Head SSA Origination, Wells Fargo Securities.
World Bank (International Bank for Reconstruction and Development, IBRD)
USD 1.5 billion
September 18, 2020
September 18, 2025
Compounded SOFR + 31 basis points
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
Business Day Convention:
Interest payment dates:
March 18, June 18, September 18 and December 18 of each year
Luxembourg Stock Exchange
Fedwire, Euroclear, Clearstream
BMO Capital Markets, RBC Capital Markets and Wells Fargo Securities, LLC
Senior co-lead manager:
With annual issuances between US$55-US$65 billion, World Bank bonds support the financing of programs that further the Sustainable Development Goals. World Bank bonds are aligned with the Sustainability Bond Guidelines published by the International Capital Market Association. The World Bank is also a member of the Executive Committee of the Green Bond and Social Bond Principles. A key priority for the World Bank’s capital markets’ engagement is building strategic partnerships with investors to promote the importance of private sector financing in sustainable 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 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.
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.
Head of Investor Relations and Sustainable Finance
World Bank Treasury