Norton Rose Fulbright advises syndicate of banks on the issue of L-Bank’s first SOFR Index Average linked USD 1 billion bond

Global law firm Norton Rose Fulbright has advised a syndicate of banks on the successful issue by Landeskreditbank Baden-Württemberg - Förderbank (“L-Bank”) of a US$ 1 billion bond (ISIN: XS2463444856) whose coupon is linked to the Secured Overnight Financing Rate (SOFR). The syndicate comprised Bank of Montreal Europe plc (Technical Lead), Deutsche Bank Aktiengesellschaft, J.P. Morgan SE and RBC Capital Markets Europe GmbH.  

The bond pays a variable coupon (SOFR Index Average plus 1.00 per cent. margin) and matures on April 1, 2025.The bond has been admitted to trading on the regulated market of the Luxembourg Stock Exchange. The order book was 1.4 times oversubscribed, with strong demand from investors across EMEA, Asia and the Americas.

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.

As development bank of the federal state of Baden-Württemberg, L-Bank is commissioned by the state to support the federal state of Baden-Württemberg in the performance of its public functions, in particular in the areas of structural, economic and social policies, administering and implementing development measures in accordance with the subsidy regulations of the European Community.

Christoph Enderstein, Frankfurt-based debt capital markets partner, who led on the deal commented: “We have advised on several bonds issued by L-Bank during the course of the last year and are pleased to have been involved also with the successful issue of the first SOFR Index Average-linked bond by L-Bank.”

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.