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Successful inaugural SOFR-linked FRN

On Wednesday 21 April, KBN successfully priced our inaugural SOFR-linked Floating Rate Note; a USD 500 million note due to October 2023.

23.04.2021 / News

The new bond is linked to the SOFR Index published by the Federal Reserve Bank of New York and thus consistent with the evolving market standard for SSA issuers.

- Given the vigorous internal preparations it’s especially pleasing to see our inaugural SOFR transaction get such an excellent reception. KBN has taken its first successful step into the floating rate SOFR-linked market and we are convinced this will be an important contributor to our funding operations going forward, says Head of Funding in KBN, Thomas Møller.

The transaction attracted a high quality orderbook, which closed in excess of USD 990mn, including particularly strong support from the bank treasury and asset manager communities. Given the positive momentum the price was revised one basis point tighter and set to SOFR +16bps.

Quotes from the leads:

Ebba Wexler, Managing Director, SSA DCM, Citi: “KBN has once again proven to be an investor favourite in the USD FRN market, this time with its inaugural SOFR-linked issuance. The orderbook impresses not only in terms of size, but also in terms of breadth of demand amongst the highest quality investors. With this issuance, KBN joins a small group of issuers that have been able to adapt and diversify funding sources in the face of an evolving risk-free reference rates market. Citi was delighted to be bookrunner on this important transaction.”

Asif Sherani, EMEA Head of Syndicate, HSBC: “Congratulations to the KBN team, who took advantage of favourable market conditions in the US Dollar market to price their inaugural SOFR transaction. This was one of the first SSA SOFR Index deals from a non-supranational issuer and KBN achieved an excellent outcome tightening spread by 1bp through the bookbuild process and generating an almost 2x oversubscribed book, filled with high-quality investors. HSBC is delighted to have been part of this next milestone for KBN in the capital markets.”

James Taunton, Director, SSA DCM, RBC Capital Markets: "Congratulations to the KBN team on a fantastic inaugural SOFR transaction; a resounding success that enjoyed a significantly oversubscribed and high quality order book. To receive such a strong reception on their first SOFR outing is a clear testament to KBN’s loyal investor following and the perfect timing of this transaction, in response to the surge in investor demand for high quality SOFR term products. RBC is delighted to have been involved in such an important milestone transaction.”

 

Distribution Statistics

By Geography

By Investor Type

EMEA

31 %

Bank treasuries

53 %

APAC

4 %

Fundmanagers

31%

Americas

65 %

CB/OIs

16 %

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