Part of its Social Bond Programme, the International Finance Corporation (IFC) issued the market's first social Secured Overnight Financing Rate (SOFR) floating rate note (FRN), raising $500 million.

The 2.5-year social SOFR FRN will be used to benefit underserved populations in emerging and developing markets. In particular it will support the IFC's continued pandemic response and its long-term strategy to build resilient health systems that can better respond to future health crises.

Despite being issued at short notice and in an unconventional window the IFC's SOFR FRN received orders in excess of $597 million from 21 investors across the world. US municipalities showed particularly strong demand and constituted almost half of the deal, despite the interest rate being below the deposit rate prevailing in the US market at that point in time.

The bond's return is variable and linked to the SOFR index.

"This was first social Secured Overnight Financing Rate floating rate note to be issued in the market. Its proceeds aim to support IFC's pandemic relief response as well as our long-term strategy to build resilient health systems that can better respond to future health crises," said Marcin Bill, head of funding, Asia Pacific at IFC Treasury. "IFC's funding team was able to put the trade together in a short time to meet internal demand and be the first to hit the market with such a product."

One awards judge described it as an "interesting, innovative structure involving an index-linked floating note".