The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new $500 million (no-grow) Long 4-year benchmark bond linked to the Secured Overnight Financing rate (SOFR) index.

The transaction pays a quarterly floating coupon of Compounded SOFR + 25 basis points and matures on February 4, 2025, with a settlement date of November 4, 2020.

This benchmark bond marks IDB’s return to the SOFR market after a one-year hiatus, and the issuer’s first bond linked to the index. An oversubscribed order-book facilitated tightening of the spread from the original SOFR + 27 area to a final SOFR + 25. Joint lead managers for this transaction are BMO Capital Markets, Citi and Wells Fargo Securities.

"We were pleasantly surprised at the strong reception for our return to the SOFR market.  As the market solidifies around the SOFR Index as the standard, the IDB anticipates on further issuance in this modality so that we can continue building an IDB SOFR linked curve.   Over time, we also hope to build our SOFR linked bond issuance to a larger size for better trading liquidity." said Laura Fan, Head of Funding at the IDB.

Investor Distribution:

Bond Summary Terms:

Joint Lead Manager Quotes:

“IDB’s return to SOFR FRN markets was an incredible success. An oversubscribed book comprised of top-tier investors enabled IDB to refine pricing 2 bps tighter from IPT, a noteworthy move in FRN markets and a tribute to the credit quality of IDB. This trade represents IDB’s first new issue linked to the SOFR Index and will extend the issuers SOFR curve. BMO was delighted to be a part of the transaction.” Sean Hayes, Managing Director & Head of US Syndicate, BMO Capital Markets

“Congratulations to IDB to a successful return to the SOFR FRN market.  We were delighted to work with IDB on this transaction, which saw a solid build out of IDB’s SOFR FRN investor base garnering an impressive book at an attractive price relative to IDB’s fixed rate curve.” Ebba Wexler, Director, Public Sector DCM, Citi

“Our congratulations to the IDB team for a solid transaction. An outstanding way to return to the SOFR market; a heavily oversubscribed book and a 2 basis points tightening from IPTs, a record compared to recent transactions. Also the issuer’s first SOFR-Index linked trade, yet another sign of market standardization towards this convention.” Carlos Perezgrovas, Head SSA Origination, Wells Fargo Securities, LLC.