NEW YORK — The Inter-American Development Bank issued a new USD1 billion seven-year benchmark bond linked to the Secured Overnight Financing Rate (SOFR) index, the multilateral bank announced today in a public statement.

The bond, with settlement on February 15, pays a quarterly floating coupon of Compounded SOFR+30 basis points and matures on February 15, 2029.

The transaction, led by BofA Securities, TD Securities and Wells Fargo Securities, marks IADB’s first SOFR-linked benchmark of 2022, as well as their second-ever 7-year SOFR-linked benchmark, the bank said in the statement. “This highly successful transaction experienced strong momentum from the outset, resulting in a high-quality order book in excess of $1.1 billion from 22 investors,” according to the statement. 

“Developing the SOFR bond curve is part of the IADB’s overall funding strategy. We were focused on the longer end as we were seeking duration. Given the lack of recent supply, we felt this week was optimal for a 7-year issuance.  The oversubscribed book allowed us to print a larger than expected size of $1 billion”, said Laura Fan, Head of Funding at the IDB.

The bond will be listed at the London Stock Exchange, with Fedwire, Euroclear, Clearstream acting as clearing agents.

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