African Development Bank (AfDB) President Akinwumi Adesina. The African Development Bank (AfDB) has launched and priced a $2 billion (R29bn) three-year Global Benchmark bond due September 16, 2022, its first US dollar benchmark of the year. File Photo: IOL

ABIDJAN – The African Development Bank (AfDB) has launched and priced a $2 billion (R29bn) three-year Global Benchmark bond due September 16, 2022, its first US dollar benchmark of the year.

Launched on September 11, the bond issue is the Bank’s second Global Benchmark of 2019, following a €1bn (R16bn) 10-year priced in March 2019. 

With this transaction, the Bank has now raised $4.4bn in 2019 to date and executed 61 percent of its borrowing program for the year. The transaction received strong support from investors globally, with order books reaching $2.8bn and 53 investors participating. 

Group Treasurer, African Development Bank Hassatou Diop N’Sele said: “We are delighted with this successful dollar Global Benchmark, and particularly pleased by both the very high quality of the order book and the solid participation of African Central Banks. The African Development Bank achieved its tightest ever spread to US Treasuries, and we are grateful to our investors across the world for this outcome, and the financing it will bring to the African continent.”

The high quality of the order book is illustrated by the strong participation of Central Banks and Official Institutions, taking 64 percent of the allocations.

The AfDB decided to take advantage of favorable investor sentiment post summer break to access the three-year tenor, in spite of volatile market conditions ahead of the Fed Meeting the following week. The mandate was announced on Tuesday, September 10, at 12pm London time with Initial Pricing Thoughts of Mid-Swaps + 13 basis points (bps) area.

The transaction met strong interest from the outset, with Indications of Interest in excess of $1.8bn – excluding Joint-Lead Managers interest – when order books officially opened at 8am London time the following morning, with initial price guidance of Mid-Swaps + 13bps area.

Momentum continued throughout the European morning, with orders in excess of $2.5bn around 11:20am London time. At this time, final pricing was set at Mid-Swaps + 13bps. Following the close of the order book in the US, the size of the transaction was set at $2bn by 2:20pm London time.

The transaction was priced at 4:24pm London time with a re-offer yield of 1.679 percent, equivalent to a spread of 8.75bps vs UST 1.5 percent 15 September 2022, the issuer’s tightest print vs US Treasuries to date.

Content supplied by AfDB.

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