7 May 2021

NIB issues its inaugural SOFR Index Linked Global Benchmark

On 6 May, NIB issued a USD 700 million five-year benchmark bond linked to the SOFR (Secured Overnight Financing Rate) index. The issue is the Bank’s inaugural Alternative Risk Free Rate transaction.

NIB’s first-ever transaction of this structure enjoyed strong reception from the outset, with 20 accounts participating and final orderbooks excessing USD 700 million. The high demand allowed the Bank to set the final spread at SOFR+19bps, 1bp tighter than IPTs.

“We are very excited about NIB’s successful first public appearance in the new risk-free rate world. We are thankful to our investor base which was happy to follow NIB into this new product and helped us achieve a strong debut. Orders from 20 investors show that the SOFR linked bond market has already become considerably deep. NIB has been preparing for the LIBOR transition and the new risk-free rates already for some time, and this landmark transaction is an important step which will also help us to develop respective products for our lending customers. We look forward to continuing our funding activities in the risk-free rate market,” says Jens Hellerup, Head of Funding and Investor Relations at NIB.

The issue had a high-quality distribution with the strongest demand coming from Banks & Bank Treasuries in Americas. It has a final maturity of 12 May 2026 and pays a quarterly coupon of SOFR +100bps. Joint lead managers for this global transaction are Citi, RBC CM, and TD.

SOFR is a benchmark interest rate for dollar-denominated derivatives and loans. Unlike the London interbank offered rate (LIBOR), SOFR is calculated based on past transactions and is considered a less risky rate.

Bond summary terms
Issuer: Nordic Investment Bank
Rating: Aaa / AAA by Moody's / S&P
Issue amount: USD 700 million
Coupon: SOFR +100bps, Quarterly, ACT/360
Launch date: 06 May 2021
Payment date: 12 May 2021
Maturity date: 12 May 2026
Final spread: SOFR +19bp
Joint lead managers: Citi, RBC CM, TD
ISIN: US65562QBR56

NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.

For further information, please contact

Mr Jens Hellerup, Senior Director, Head of Funding and Investor Relations, at +358 961 811 401, jens.hellerup@nib.int

Ms Angela Brusas, Director, Funding and Investor Relations, at +358 961 811 403, angela.brusas@nib.int

Mr Alexander Ruf, Director, Funding and Investor Relations, at +358 961 811 402, alexander.ruf@nib.int