Share this page

IFC Leads Transition to SOFR with Landmark $2 Billion Bond Issuance

Washington, D.C., August 31, 2021— IFC issued a landmark $2 billion, fixed-rate five-year USD-denominated bond, helping to ease the transition to the Secured Overnight Financing Rate (SOFR) and raising $2 billion for private sector development and job creation in emerging markets.
 
The bond issue, which attracted strong investor demand, advances IFC's transition from the benchmark interest rate known as LIBOR, which is scheduled to be discontinued by the end of June 2023. As part of the global reform, the Alternative Reference Rate Committee chose SOFR as the preferred LIBOR alternative for U.S. dollar issuances. The bond is the first fixed-rate issuance marketed and priced using SOFR among IFC's peer group.
 
Since early last year, IFC has been at the forefront of LIBOR reform, this year swapping its plain vanilla fixed-rate issuances to SOFR. This week's transaction is IFC's first public benchmark since the July 1 start of FY 2022, and the issuance demonstrates support by IFC for the "SOFR First" initiative launched July 26 by the Commodity Futures Trading Commission.
 
"Effective development depends on well-functioning financial markets. For the past year and a half, IFC staff has been working toward a seamless departure from LIBOR, and we are proud to reach this important milestone in our transition to SOFR," said Tom Ceusters, Director of Treasury Market Operations at IFC. "Over the coming months, IFC will continue to move its balance sheet to SOFR. We are committed to ensuring a smooth transition for our borrowers and the people of the countries in which we operate."
 
Joint lead managers for this transaction are BNP Paribas, J.P. Morgan, Nomura and TD Securities.
 
Jamie Stirling, Managing Director, Head of DCM SSA, BNP Paribas commented:
"IFC has traditionally acted as a pioneer for market reform to the SSA sector and this landmark transaction deal will pave the way for transition to new market standards. BNP Paribas is delighted to be supporting IFC and the SOFR First Initiative with the first benchmark to be marketed versus SOFR swaps rather than LIBOR swaps. By pricing at the tightest level of any 5-year USD supranational benchmark this year, the success of the deal illustrates the ability of IFC to smoothly transition to new market standards with no change to their issuance strategy.  Our actions around LIBOR reform are global in scale and supporting IFC in this momentous transaction highlights our partnership, trust and expertise in this critical financial market reform."
 
Matthieu Batard, Executive Director, Head of SSA Syndicate, J.P. Morgan said:
"Congratulations to IFC on a landmark transaction – leading the way with the SSA market's first USD benchmark marketed vs SOFR mid-swaps, whilst also achieving the tightest comparable spread in 5-years this year to date.  The seamless execution and high quality distribution reflects the hard work and dedication of the funding team in this space.  J.P. Morgan were delighted to be involved in this historic project in market reform."
 
Spencer Dove, Managing Director, Head of DCM SSA, Nomura said:
"IFC remains a rare and eagerly anticipated participant in the Global US$ markets. Once again the team have started their new financial year with a barnstormer of a trade, simultaneously paving the way in supporting the broader market in its evolution from Libor to SOFR as a primary market pricing reference for fixed rate bonds. As always, the trade received extremely strong support across time zones with no sensitivity to the new methodology. With the work IFC have done to convert its own balance sheet over the course of 2021, I can't think of a better name to undertake this challenge and it has been Nomura's pleasure to be part of this trade. Congratulations to the IFC team."
 
Laura O'Connor, Managing Director, TD Securities said:
"We congratulate IFC for being the first issuer to embrace the SOFR First initiative by issuing the first fixed-rate USD benchmark referencing SOFR mid-swap. IFC started transitioning its balance sheet and hedging activities from LIBOR to SOFR at the beginning of 2021 but with this issuance, IFC reached the next milestone and has clearly paved the way for the removal of the use of LIBOR in the new issue process for SSA borrowers going forward. IFC's diligent use of this new reference benchmark successfully led to a healthy oversubscribed final orderbook of USD 3.5bn with participation from global investors."
 
Bond Summary Terms:

Issuer: International Finance Corporation (IFC)
Issue ratings: Aaa / AAA (stable / stable)
Format: Global SEC exempt
Size: US$ Benchmark
Settlement: 8 September 2021
Maturity: 8 October 2026 (5Y)
Coupon: Fixed, Semi-Annual, 30/360, Long First
Listing: London Stock Exchange's regulated market
Denominations: US$1k + US$1k
Docs: Issuer's Global Medium-Term Note Program
Target Market: Retail / Professional / Eligible Counterparties (MIFID II/MIFIR, all distribution channels)
Joint Leads: BNP / JPM / Nomura / TD Securities
 
Investor Stats-
 
Type:
Central Banks/Official Institutions 44.5%
Banks 37.7%
Asset Managers 17.8%
 
Geography:
Europe 40.6%
Asia 32.6%

Americas 26.7% 

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 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org. 
 
Stay Connected
www.facebook.com/IFCwbg
www.twitter.com/IFC_org
www.youtube.com/IFCvideocasts
www.ifc.org/SocialMediaIndex

www.instagram.com\ifc_org