The European Bank for Reconstruction and Development (EBRD, Aaa/AAA/AAA) successfully launched a USD 850 million 5-year Global SOFR FRN, the issuer’s first SOFR index-linked Floating Rate Note Benchmark since the beginning of the year, and follows on from their USD 1 billion 4-year SOFR Floating Rate Note last October.
Encouraged by a positive global market backdrop following the Easter break, EBRD accessed the market swiftly to price the tightest 5-year SOFR linked Floating transaction launched by an SSA issuer to date.
The mandate for a new USD benchmark 5-year FRN transaction was announced on Tuesday 6th April at 1.45pm UKT with Initial Pricing Thoughts of SOFR+20bps area. Indications of Interest built steadily throughout the US day and into the Asian session, reaching over USD 800 million by the time books formally opened at 8.20am UKT.
Interest from investors continued to grow throughout London morning, enabling the spread to be set at SOFR+19bps, one basis point tighter than Initial Pricing Thoughts, at 11:15am UKT. The deal was upsized to USD 850 million on the back of high quality interest from 27 investors, with final orders in excess of USD 900 million.
In terms of investor distribution, Asset Managers (43%) and Bank Treasuries (45%) were core to the transaction, whilst Corporates (12%) were also notable. Geographically, US investors were prominent with 63% allocation, followed by EMEA 8% and UK 28%. This transaction was joint-lead managed by BofA Securities, Daiwa, J.P. Morgan and Nomura.