IFC Launches $1 Billion Inaugural SOFR Bond

Washington, D.C., June 22, 2021— IFC priced its inaugural Secured Overnight Financing Rate (SOFR) bond, a 2-year USD-denominated benchmark raising $1 billion for private sector development and job creation in emerging markets. 

"This milestone transaction marks IFC's first ever SOFR-linked benchmark issuance and represents its commitment to growing the floating rate market away from LIBOR and towards alternative overnight risk-free rates," said Tom Ceusters, IFC Director, Treasury Market Operations. 

"IFC is monitoring market developments and working toward a smooth transition to a successor benchmark rate to augment our funding program which supports our institutional mandate of unlocking private investment, creating markets and opportunities where they're needed most."  

The transaction, anchored by orders primarily from the Americas and Europe, priced at par, with a quarterly floating coupon of SOFR + 9 basis points. This will be calculated using a five-day observation lag on compounded daily SOFR, with no lockout. The note settles on June 30, 2021 and matures on June 30, 2023.

Joint lead managers for this transaction are BMO Capital Markets, TD Global Finance and Wells Fargo Securities. Senior co-leads are CastleOak Securities and Incapital LLC.

"We were delighted to be involved in the inaugural SOFR benchmark for IFC. The choice of a 2y maturity worked well given the limited supply in this part of the curve this year. The transaction attracted high quality investor demand, particularly from the US, as well as achieved a very competitive cost of funding for IFC. This transaction is a milestone for the IFC balance sheet transition to SOFR – congratulations to the IFC team!" said Laura O'Connor, Managing Director, Fixed Income Origination & Syndication, TD Securities. 

"We are honored to be part of International Finance Corporation's inaugural SOFR-linked benchmark FRN. With this transaction, the IFC takes another great step towards a full Libor-SOFR transition. The issue achieved the tightest spread of any SOFR transaction in the Supranational sector, and received phenomenal support from public sector entities. Congratulations to the IFC funding team," said Carlos Perezgrovas, Head SSA Origination, Wells Fargo Securities, LLC.

"IFC's leadership in the development of SOFR cash and derivatives markets culminated in this inaugural bond offering. The transaction reached unique investors across the globe in search of SOFR assets, anchored by demand from US state funds and money managers. Congratulations to IFC on its latest accomplishment surrounding benchmark reform, BMO was thrilled to be a partner," said Sean Hayes, Managing Director, Head US Syndicate & Credit Sales.

Bond Summary Terms:

Issuer: International Finance Corporation (IFC)
Issuer Rating: Aaa/AAA (all stable)
Notional Amount: USD 1,000,000,000
Settlement Date: 30 June 2021
Maturity Date: 30 June 2023
Coupon: Compounded SOFR + 9 bps, Quarterly, ACT/360
Convention: SOFR Index where SOFR Index Start and SOFR Index End will be 5 days prior to Interest Period
Coupon Payments: 30th of each March, June, September and December
Reoffer Price: 100.00%
Listing: London Stock Exchange's Regulated Market
Law: New York
Clearing: DTC, Euroclear, Clearstream
Joint Lead Managers: BMO Capital Markets, TD Global Finance, Wells Fargo Securities
Co-leads: CastleOak Securities, Incapital LLC
ISIN / CUSIP: US45950KCW80 / 45950KCW8

Investor Distribution:

About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in 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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