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IDB launches US$1 billion 5-year Floating Rate Global Sustainable Development Bond

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new US$1 billion 5-year Global Sustainable Development Bond (SDB) benchmark.

The transaction pays a quarterly coupon of SOFR+28bps and matures on April 12th, 2027. The new benchmark was priced at a discount margin of 28 basis points over the Compounded SOFR Index.

The transaction marks the first USD floating rate note benchmark issued under IDB’s Sustainable Development Bond framework. IDB’s Sustainable Development Bonds raise awareness for their strategic priorities which are aligned to all 17 United Nations Sustainable Development Goals.

This latest US$1 billion 5-year transaction enjoyed strong investor momentum from the outset allowing IDB to upsize from an initial US$500 million target. The strength of the orderbook was underscored by the high participation of Banks who accounted for 85% of the final allocation respectively.

"Strong investor interest in ESG products allowed us to successfully print our inaugural 5-year SOFR FRN in Sustainable Development Bond format.  We continue to develop our SOFR benchmark curve and hope to add more maturities later this year" Laura Fan, Head of Funding, IDB.

Investor Distribution:

Geographic Region

Investor Type

EMEA

39%

 

Central Banks / Official Institutions

12%

Americas

61%

 

Banks / Private Banks

85%

 

 

 

Fund Managers / Corporates

3%

 

Bond Summary Terms:

Issuer:

Inter-American Development Bank (Ticker: IADB)

Issuer rating:

Aaa / AAA, all stable (Moody’s / S&P)

Amount:

USD 1 billion

Settlement date:

12 April 2022 (T+5)

Coupon:

Compounded SOFR+28bps

Coupon payment dates:

12th of July, October, January and April each year (quarterly)

Maturity date:

12 April 2027

Issue price:

100%

Floating Reference

SOFR Index

Reoffer spread (bps):

SOFR+28bps

Listing:

London Stock Exchange

Clearing systems:

Fedwire, Euroclear, Clearstream

Joint lead managers:

Citibank, Deutsche Bank and Nomura

ISIN / CUSIP:

US4581X0ED60 / 4581X0ED6

 

Joint Lead Manager Quotes:

“Congratulations to the IDB to their second Floating Rate (FRN) benchmark of 2022.  This new 5 year refreshes the IDB FRN curve and further cements IDB’s status as regular & consistent issuer of FRNs. Citi was delighted to be involved” said Ebba Wexler, Managing Director, Public Sector DCM Citi.

“The Inter-American Development Bank (IDB) continues to champion the SOFR market with more than $8 billion outstanding, across 7 benchmark lines. Today’s transaction was once again well timed and provides the market with what it wants – SOFR product from top tier, 0% risk-weighted names – given the unprecedented rise in rates and volatility that investors are having to navigate. Furthermore, the IDB utilized their Sustainable Development Bond (SDB) framework making this an inaugural SOFR SDB, where the IDB are actively supporting countries in Latin America and the Caribbean to achieve the Sustainable Development Goals. Congratulations!” said Mark Yeomans, Managing Director, SSA DCM at Nomura.

“Congratulations to the IDB team on their second SOFR-Linked FRN Global Benchmark of 2022, their first ever in Sustainable Development Bond format. The high quality orderbook reinforces the IDB’s position as a leading issuer with a complete curve in this market. Quickly reacting to attractive market conditions and investor appetite for FRN product on the back of the global rates environment, allowed IDB to match the 1 billion size of its previous 7-year SOFR FRN benchmark launched earlier this year. Deutsche Bank is proud to have supported our client, the IDB in this transaction” said Katrin Wehle, Managing Director, SSA DCM Origination, Deutsche Bank.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

Information on bonds for Investors is available on the IDB website: https://www.iadb.org/investors.

*This press release is not an offer for sale of the securities of the Inter-American Development Bank. Any offering of IDB securities will be made only by means of a prospectus or other definitive offering document that contains important information about the securities, the offering and IDB. Offerings of securities will be made only in compliance with applicable laws.

Additional Contacts

Fan,Laura Emily

Fan,Laura Emily
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