World Bank's SOFR-Linked Bond Attracts Varied Investors

WASHINGTON, D.C., February 15, 2024 - The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) today priced a USD 1.25 billion Sustainable Development Bond linked to the Secured Overnight Financing Rate (SOFR) Index maturing on February 23, 2027.

The transaction attracted interest from a diverse set of investors seeking a high credit quality investment while supporting sustainable development. The book totaled USD 1.5 billion across 35 orders. The 3-year SOFR-index linked note pays a coupon of Compounded Daily SOFR +28 basis points.

BMO Capital Markets, Scotiabank, and Wells Fargo Securities are the lead managers for the transaction. The bond will be listed on the Luxembourg Stock Exchange.

Jorge Familiar, Vice President and Treasurer, World Bank, said, "We are thrilled to return to the SOFR market in 2024 with a transaction that appealed to both returning and new SOFR investors. Our continued offering of SOFR-index linked bonds is just one example of our commitment to bring high quality, liquid products to the market that also offer investors an opportunity to support the World Bank's mission to end extreme poverty and boost prosperity on a livable planet."

Investor Breakdown by Type

Investor Breakdown by Geography

Lead Manager Quotes

Sean Hayes, Head of US Syndicate, BMO Capital Markets, said, "The World Bank has once again accelerated the development of SOFR floating rate product, attracting first-time buyers through this Sustainable Development Bond. As the only SSA borrower to issue a floating rate note (FRN) every year since SOFR inception, the regularity of World Bank in FRNs has both long-standing and new investors looking to their transactions as the true benchmark."

Bob Nguyen, Global Head of Fixed Income Origination, Scotiabank, said, "Scotiabank was delighted to serve as a joint bookrunner on the World Bank's outstanding 3-year USD 1.25 billion floating rate note to support their sustainable development activities in member countries. The deal's success can be attributed to a number of factors, including the increasing demand for FRNs, strategic tenor, and use of the sustainable label. Congratulations to the World Bank team on today's terrific outcome."

Carlos Perezgrovas, Head of SSA Origination, Wells Fargo Securities, said, "Another successful result from the World Bank in pricing the first $1 billion or greater SSA floating rate note in the primary market since World Bank's own 4-year SOFR index-linked benchmark in January 2023. The World Bank took advantage of pent-up demand, little competing supply, and a stable backdrop to price the tightest 3-year benchmark, fixed or floating, USD transaction of the year. World Bank affirms its position as a premier borrower in FRN product. Wells Fargo is delighted to be part of this trade."

Transaction Summary

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