Sovereign Bond of the Year
France
€7bn 0.5% June 2044
BNP Paribas, Citi, Crédit Agricole, HSBC, JP Morgan
With this transaction, France introduced a novel way of tackling the challenge of inflated order books in eurozone sovereign syndications by having an open dialogue with investors (mainly fast money accounts) to make their orders more reasonably sized.
Spain and Italy should also be commended for attempting to contend with inflated orders. But they chose to bring spreads in aggressively, leaving little value for fast money accounts to stick around, resulting in colossal drops in orders.
By contrast, France’s approach of engaging with investors during syndication showed a less volatile and more constructive way of dealing with the challenge, one which avoids unnecessary drops in order books.
Supranational Euro Bond of the Year
European Union
€20bn 0% July 2031
BNP Paribas, DZ Bank, HSBC, Intesa Sanpaolo, Morgan Stanley
To call the EU’s debut bond under the €800bn Next Generation EU (NGEU) funding programme a blowout is an understatement. At €20bn, the deal was the largest single tranche syndicated institutional bond sale in history. Orders for the landmark trade topped €142bn, just shy of the €145bn book that the EU received for its debut SURE transaction in 2020 — a bond market record that still stands.
“The size of the deal is really a reflection of the pretty overwhelming support that came from real money investors,” said a banker at one of the EU’s leads. “When we went through the order book to set the size we were in a position where even for a €20bn size, the allocations were extremely harsh.
A head of SSA DCM away from the deal said the trade sent “a very strong signal” to kick-start the EU’s NGEU issuance.
Supranational Dollar Bond of the Year
International Finance Corporation
$2bn 0.75% October 2026
BNP Paribas, JP Morgan, Nomura, TD Securities
IFC blazed a trail by becoming the first borrower to price a fixed rate dollar benchmark versus Sofr mid-swaps, rather than Libor mid-swaps in an important step in the transition away from the use of Libor in the bond markets.
The trade generated strong interest from investors and the leads found themselves fielding calls both from investors and issuers inquiring about the technical details of the pricing.
Several borrowers soon followed, pricing versus Sofr mid-swaps, which has now become unanimously accepted as the convention for pricing fixed rate dollar bonds in the SSA market.
IFC is also leading the way in other aspects of the transition from Libor. Since February 2021, for example, it has swapped all of its fixed rate issuances in all currencies into Sofr.
Agency Dollar Bond of the Year
KfW
$3bn 1% October 2026
Bank of America, HSBC, TD Securities
With a size of $3bn, KfW sold the largest ever green bond in dollars, proving demand is just as strong in dollars as it is in euros for green bonds. The final book size of over $11bn was also a record for the dollar green bond market.
Despite the size, KfW was able to price the deal flat to fair value or even slightly through its curve. The spread to US Treasuries of 5.25bp was also the tightest for a five year SSA dollar benchmark for 20 years.
“We’ve seen a lot of impressive green trades in euros and sterling, but not so much in dollars,” said a banker at one of the leads. “KfW really capitalised there and showed there’s a deep market for the product. For issuers that are skewed in favour of euros, this might give them the impetus to look at the dollar market for green funding.”
Agency Euro Bond of the Year
BNG
€2bn 0.125% April 2033
Bank of America, DZ Bank, Natixis, Rabobank
This was BNG’s largest ever sustainability bond and the first deal under its new sustainability bond framework, which has been updated to reflect the fact that the budgets of all Dutch municipalities are linked to the UN’s 17 Sustainable Development Goals.
The deal came into a busy market, with EFSF, Eurofima and Ile de France also joining with deals, but BNG still managed to attract a strong reception, with the order book peaking at €3.5bn, allowing the deal to land flat, or even slightly through value.
Sub-Sovereign Bond of the Year
Isle of Man
£400m 1.625% September 2051
Barclays, HSBC, Santander
The Isle of Man made an extremely rare appearance with its first bond in 20 years and just third trade ever as it sold its debut sustainability bond.
The deal was well received, with around £650m of orders from 60 investors — a vast book for an offshore island with a population of just over 83,000 — proving there is ample demand for sterling bonds with a socially responsible label.
At 1.625%, the sub-sovereign achieved the lowest coupon by any offshore island to date by some margin.
The deal provided a good backdrop for the UK’s debut green Gilt, which followed a fortnight later (see separate entry).
Risk-Free Rate Bond of the Year
World Bank
$600m February 2031 Sofr FRN
RBC Capital Markets, Wells Fargo Securities
With a maturity of 10 years, this was the longest-ever Sofr-linked floating rate note from a public sector borrower. The previous longest Sofr FRN from an SSA borrower was a seven year deal last year, which also came from the World Bank.
Since bringing the first Sofr-linked FRN from an SSA borrower in 2018, World Bank has set a number of landmarks for the product.
“Even in the days of Libor, a 10 year floater was an extremely rare trade, but we’ve been building out the Sofr curve, supplying significant, liquid benchmarks to help with the transition to alternative ibor indices,” said the borrower.
The bond was tapped a few months later with strong follow-on demand.
SSA SRI Bond of the Year
European Union
€12bn 0.4% February 2031
Bank of America, Crédit Agricole, Deutsche Bank, Nomura,
TD Securities
The European Union entered the green bond market impressively, bringing the biggest ever deal size and order book for a transaction in the format across any currency and asset class.
The EU priced its debut green bond flat to its own secondary curve but taking into account the new issue premium it would pay for a conventional bond, the EU and its leads calculated a ‘greenium’ of 2.5bp.
The European Commission has said it will seek to raise 30% — or up to €250bn — of its Next Generation EU (NGEU) issuance in green format, making it the largest green bond issuer in the world. This has led many market participants to believe it will become the main benchmark for the European green bond market.
SSA Sterling Bond of the Year
United Kingdom
£10bn 0.875% July 2033
Barclays, BNP Paribas, Citi, Deutsche Bank, HSBC, JP Morgan
The UK made a grand entrance into the green bond market with its debut green Gilt, which was at the time the biggest ever deal size and order book for a green bond, only to be beaten by the EU’s debut a few weeks later.
Nevertheless, it was still an impressive transaction and important one for the development of the sterling socially responsible bond market, with many market participants expecting green Gilt issuance to spur other borrowers to issue ESG-labelled bonds in sterling.
The UK also achieved a 2.5p greenium for its debut green Gilt — the highest pricing advantage for a green bond versus a conventional deal from a high grade sovereign, beating the previous record by Germany, which paid a 2bp greenium in 2020.
