We received detailed information from the exchange agent about the types of questions and feedback they received from investors. “It offered us another avenue of contact with our retail investor base and gave us an opportunity to provide an additional service. “We put in place the program to offer choice to investors and raise awareness in general in the market around valuation issues now that LIBOR will fully disappear as a reference rate soon,” said George Richardson, Director, Capital Markets and Investments, World Bank. The successful completion of the exchange marks another ‘first’ for the World Bank. There was no obligation to take the exchange.Īt the end of the four-week window, the exchange agent had responded to over 125 investor and custodian requests for information and approximately 180 orders were placed by holders of the bonds to exchange 42% of the outstanding bonds for a total of USD 360 million. Investors, their agents, and custodians were notified of the exchange offer via BNP Paribas serving as dealer manager as well as through a dedicated exchange agent and publication in Italian newspapers and had four weeks to express their interest. The bonds totalled approximately USD 850 million at the time of their issuance.
Included in the exchange were bonds originally sold mostly to retail investors in Italy in 20, but they also reached investors elsewhere in Europe and Asia. This was the first time that bonds were offered to retail investors as part of the transition from LIBOR to SOFR for a Sovereign, Supranational and Agency (SSA) bond issuer.
Exchange offers for retail investors are rare. An extensive communication campaign was conducted to reach individual noteholders to inform them of market developments that would affect their bond holdings and give them the option to exchange their bonds for new, market-conforming bonds.
WASHINGTON, D.C., J- The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) successfully completed a retail investor-oriented exchange offer of existing floating rate bonds referencing LIBOR (London Interbank Offered Rate) to new bonds that reference a SOFR (Secured Overnight Financing Rate) index.
Bond exchange offered investors the option to exchange bonds referencing LIBOR for new SOFR index-linked bonds
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