African Development Bank launches $2 billion five-year global benchmark bond due 2028

NAIROBI, Kenya - The African Development Bank has launched and priced a USD 2 billion 5-year Global Benchmark bond due March 14, 2028, it's first of the year. The bond was issued on 7 March.

This new bond seeks to cement the continental lender’s obligation of funding strategy by issuing large liquid benchmark transactions and adds another on-the-run reference in the 5-year maturity while extending its outstanding USD curve.

With the final order book closing in excess of USD 3.5 billion and 95 investors participating, the African Development Bank set the size of the transaction at USD 2 billion. The issue garnered interest from top-quality investors with particularly good demand from Central Banks / Official Institutions.

The Bank’s mandate for a 5-year USD Global Benchmark was announced earlier this month at a time with Initial Pricing Thoughts (IPTs) released at mid-swaps plus 35bp (basis points) area at 12.34 London time.

Part of the statement read, “The deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest reaching USD 2.1 billion by the time books officially opened on Tuesday 7, March 2023 at 07:57 London time.

“The order book continued to grow throughout the European morning, with investor demand equaling USD 3.5 billion by 10:28 London time, which allowed the spread to be tightened by 2bps and set at SOFR mid-swaps + 33bps. Shortly thereafter, at 12:54 London time, the high-quality order book allowed the transaction to be launched with a size of USD 2 billion, with Americas books set to go subject at 13:30 London time.”

The bank said the issue garnered interest from central banks and official institutions.

The lead managers of the bond include Barclays, Crédit Agricole CIB, Deutsche Bank, J.P. Morgan, and TD Securities. The co-lead manager is CastleOak Securities.

The AfDB seeks to spur sustainable economic development and social progress in its regional member countries, thus contributing to poverty reduction on the African continent.

GAROWE ONLINE