World Bank Expands SOFR Index-Linked Market with USD 1.5 Billion Transaction

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.”

Investor Distribution 


By Investor Type



By Region

Asset Managers/Pension/Insurance 45% Americas 61%
Banks/Bank Treasuries/Corporates 45% Europe 39%
Central Banks/Official Institutions 10%  

“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.

Transaction Summary

Issuer: World Bank (International Bank for Reconstruction and Development, IBRD)
Issuer rating: Aaa/AAA
Amount: USD 1.5 billion
Settlement date: September 18, 2020
Maturity date: September 18, 2025
Issue price: 100.00%
Interest rate: Compounded SOFR + 31 basis points
Compounded SOFR: 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: Actual/360
Interest payment dates: March 18, June 18, September 18 and December 18 of each year
Denomination: USD 1,000
Listing: Luxembourg Stock Exchange
Clearing System Fedwire, Euroclear, Clearstream
Lead managers: BMO Capital Markets, RBC Capital Markets and Wells Fargo Securities, LLC
Senior co-lead manager: Castleoak
ISIN: US459058JJ33

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.

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