World Bank Prices Global Dual Tranche SOFR Index-Linked Offering and Raises USD 3.5 Billion

The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a new USD 2.35 billion 2-year benchmark bond and raised an additional USD 1.15 billion for its August 2027 bond – both linked to the Secured Overnight Financing Rate (SOFR) index.

These transactions continue to meet investor demand from US financial institutions and global bank treasuries seeking high-quality, SOFR-linked floating rate product. The proceeds from the USD 3.5 billion dual tranche offering will be used to finance the World Bank’s sustainable development activities.

The high-quality orderbook closed with USD 3.7 billion of interest with broad global distribution across the two tranches and 70 orders. Joint lead managers for the transactions are BMO Capital Markets, RBC Capital Markets, and Wells Fargo Securities.

Jingdong Hua, Vice President and Treasurer, World Bank said, “This is an amazing result. With these transactions, we are extremely pleased to be able to continue contributing to the development of the SOFR market at both ends of the curve. By offering investors the opportunity to participate in liquid World Bank SOFR transactions in both 2- and 7-year maturities on the same day, we were able to attract a growing investor base of domestic and international investors to the SOFR market. We want to thank investors for the support and strong showing in the World Bank’s first SOFR transactions of 2021”.

Joint Lead Manager Quotes

Sean Hayes, Managing Director & Head of US Syndicate & Credit Sales, BMO Capital Markets said, “World Bank kicks off 2021 USD funding in ground-breaking fashion. As the Sovereign, Supranational and Agency (SSA) borrower community focused on fixed rate offerings, the World Bank printed a first-of-its-kind SOFR floater deal. Raising USD 3.5 billion across a dual-tranche SOFR outing marks the largest ever SSA SOFR deal, including the largest single-tranche in the 2-year maturity. Increasing liquidity by re-opening the world’s longest outstanding SOFR bond by means of the 7-year tap illustrates continued leadership and market development by the World Bank as the bond market continues to transition away from LIBOR. From the innovation of World Bank to the remarkable investor support to bring this transaction to fruition, BMO was thrilled to be a partner”.

Jigme Shingsar, Managing Director, RBC Capital Markets said, “World Bank’s record setting return to the SOFR market sets a new standard for liquidity and breadth of distribution while continuing the World Bank’s pioneering work developing the long end of the SOFR curve. This transaction is another important milestone for SOFR and comes at a time when the market needs more case studies demonstrating successful navigation of benchmark reform and the transition to risk-free rates”.

Carlos Perezgrovas, Head SSA Origination, Wells Fargo Securities LLC said, “With this dual tranche USD 3.5 billion issuance, the World Bank continues to lead the way in the growing SOFR funding market. This trade exhibited strong demand on both parts of the curve from new investors in the Americas and Europe, Middle East and Africa regions, highlighting the constructive tone of the SOFR market. It was a pleasure working with the World Bank team on this transaction”.

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