World Bank Expands Leadership in USD SOFR Market with Second Transaction of 2024
WASHINGTON – The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a USD 1.5 billion Sustainable Development Bond linked to the Secured Overnight Financing Rate (SOFR), maturing on May 15, 2028.
The transaction attracted over 55 orders with an order book of nearly USD 2.1 billion from a diverse set of investors seeking a high credit quality investment while supporting sustainable development. The 4-year SOFR-index linked note pays a coupon of Compounded SOFR +30 basis points.
BMO Capital Markets, CIBC, and Deutsche Bank AG are the lead managers for the transaction. The bond will be listed on the Luxembourg Stock Exchange.
Andrea Dore, Global Head of Funding, World Bank, said, “We are really pleased to offer investors another SOFR benchmark in 2024 enhancing liquidity and meeting demand for high-quality investment in floating rate format while also bringing an investment that supports sustainable development. We are grateful for the robust support investors have shown for World Bank SOFR FRN issuance, which has allowed us to print several sizeable transactions and continue to support development of the SOFR market.”
Investor Breakdown by Type
| Banks/Bank Treasuries/Corporates | 66% |
| Asset Managers/Insurance/Pension Funds | 29% |
| Central Banks/Official Institutions | 5% |
Investor Breakdown by Geography
| Americas | 53% |
| Europe/Middle East/Africa | 43% |
| Asia | 4% |
Lead Manager Quotes
Sean Hayes, Managing Director & Head of US Syndicate, BMO Capital Markets, said, “In a market backdrop where the trajectory of anticipated rate cuts has become less clear, World Bank prints the largest floating rate note (FRN) since its own in January 2023. The 4-year maturity was met with a strong investor response, allowing World Bank to both tighten the spread and print larger size than the FRN market standard.”
Christina Cho, Managing Director, Government Solutions Group, CIBC Capital Markets, said, “CIBC is proud to support the World Bank by delivering an oversubscribed and well-distributed US dollar benchmark transaction. The 4-year SOFR FRN issuance in the sovereign, supranational, and agency (SSA) sector with a formidable deal size of USD 1.5 billion reiterates the World Bank’s status as the leading USD SOFR issuer, and its continuous involvement in sustainable development. Congratulations to the World Bank on another successful FRN transaction.”
Katrin Wehle, Managing Director, Head of SSA DCM Origination, Deutsche Bank AG, London Branch, said, “Congratulations to the World Bank for successfully pricing their second USD FRN benchmark in 2024. On the back of a stable market backdrop, the World Bank moved quickly to take advantage of a clear execution window, placing a USD 1.5 billion Sustainable Development Bond. The orderbook was of high investor quality and granularity, which is a testament to the World Bank’s position as a market leader. Thank you to the World Bank Team for trusting us with this prestigious USD FRN benchmark transaction.”
Transaction Summary
| Issuer: | World Bank (International Bank for Reconstruction and Development) |
| Issuer rating: | Aaa / AAA (Moody’s/S&P) |
| Amount: | USD 1,500,000,000 |
| Settlement date: | May 15, 2024 |
| Maturity date: | May 15, 2028 |
| Coupon: | Compounded SOFR + 30 bps |
| Coupon payment dates: | February 15, May 15, August 15 and November 15 of each year |
| Issue Price: | 100.00% |
| Denomination: | USD 1,000 |
| ISIN: | US459058LG65 |
| Clearing systems: | Fedwire, Euroclear, Clearstream |
| Listing | Luxembourg Stock Exchange |
| Joint lead managers: | BMO Capital Markets, CIBC, and Deutsche Bank AG, London Branch |