12/01/2021 | Press release | Distributed by Public on 12/02/2021 17:38
Global law firm Norton Rose Fulbright has advised a banking syndicate on the issuance by the State of North Rhine-Westphalia of a US$600 million bond with a coupon linked to the Secured Overnight Financing Rate (SOFR). The syndicate consisted of Bank of Montreal Europe plc, Nomura Financial Products Europe GmbH, Scotiabank (Ireland) Designated Activity Company and The Toronto-Dominion Bank (Technical Lead).
The bond pays a variable coupon (SOFR average plus 1.00% margin) and matures on December 1, 2023.The bond has been admitted for trading on the regulated market of the Luxembourg Stock Exchange. The issue met high demand from investors worldwide. The bond was issued to finance the budget of the State of North Rhine-Westphalia.
The SOFR is based on the US repo market, where short-term liquidity is traded and hedged by way of US government securities. Unlike the LIBOR (London Interbank Offered Rate) with its underlying estimates of the rates at which banks would grant each other unsecured loans, the SOFR is based on real transactions.
Christoph Enderstein, Frankfurt-based debt capital markets partner, who led on the deal commented: "We have advised on several bonds issued by the State of North Rhine-Westphalia during the course of this year and are pleased to have been involved also with the successful issue of the first SOFR-linked bond by the State of North Rhine-Westphalia."
The Norton Rose Fulbright Frankfurt team also included banking and finance counsel Dr. Michael Born and associates Andre Franchini Giusti and Quynh-Anh Nguyen-Xuan.
Norton Rose Fulbright's Frankfurt debt capital markets team advises both investment banks and issuers in connection with national and international capital market transactions in the areas of debt capital markets and structured finance, in particular on bonds, commercial paper, covered bonds, structured bonds, securitized derivatives, hybrid instruments, registered bonds, Schuldschein loans and debt issuance programmes, as well as related regulatory issues.
The Toronto-Dominion Bank was advised in-house by Fran Watson. On behalf of the State of North Rhine-Westfalia, the Ministry of Finance was responsible for the issuance of the bond.
Ayfer Ekingen, PR & Communications Executive
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