Washington, D.C., January 10, 2019 —IFC, a member of the World Bank Group, entered the Sterling Overnight Index Average (Sonia) bond market for the first time, raising 500 million pounds from investors in the United Kingdom and Europe to help create jobs and stimulate private sector growth and entrepreneurship in developing countries.
IFC’s three-year public floating rate note helps deepen the market for bonds linked to Sonia, which is administered by the Bank of England as it phases out what was once the leading global benchmark for bonds—the London Interbank Offered Rate (LIBOR). The bond was significantly oversubscribed—by 130 million pounds. U.K investors accounted for most of the orders.
“We are pleased to have contributed to the market development for LIBOR alternative reference rate,” said Tom Ceusters, IFC Director, Treasury Market Operations. “IFC’s inaugural Sonia-linked trade was our first public issuance in capital markets for 2019, and it was met with great support from UK investors.”
Adrien de Naurois, Managing Director, Head of EMEA Syndicate, Bank of America Merrill Lynch said: “Congratulations to IFC for another outstanding sterling transaction and their inaugural in Sonia format. Despite a busy market, the tight pricing and healthy oversubscription is testament to the high regard in which IFC are held by the sterling investor base.”
Philip Brown, Managing Director, Head of SSA DCM Citi said: “Citi was delighted to be part of IFC’s inaugural Sonia-linked transaction. From the announcement yesterday to pricing today, the transaction progressed very elegantly, benefitting from broad investor demand for the new sterling reference rate.”
Damien Carde, Managing Director, Head of Frequent Borrower Group DCM said: “With IFC’s first foray into the public markets this year, they have achieved their largest-ever orderbook in sterling and also made their inaugural entrance into alternative reference rates for Libor. A spectacular start to 2019 and an honor to be involved at NatWest Markets.”
Kerr Finlayson, Director, Head of SSA Syndicate said: “IFC continued their track record of highly successful inaugural transactions with their first Sonia benchmark. The quality and breadth of distribution was a testament to that great combination of rarity and credit quality that IFC represents. The final distribution also reaffirmed the value of IFC's consistent focus on investor relations that underpins the funding strategy.”
IFC Sonia Bond Terms
Issuer: IFC (International Finance Corporation)
Amount: GBP 500 million
Pricing date: 8 January 2019
Settlement date: 18 January, 2019
Maturity date: 18 January, 2022
Issue price: 100 %
Coupon: Sonia +25bps, daily compounded Sonia, paid quarterly, 5-day observation lag, Act/365F
Listing: London
Joint Lead Managers: BofA Merrill Lynch, Citi, NatWest Markets, RBC CM
Distribution by Geography (%)
UK (96%)
Euro area (4%)
Distribution by Investor Type (%)
Bank Treasuries: (92%)
Asset Managers: (5%)
Central Banks/Official Institutions: (3%)
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
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