The African Development Bank (www.AfDB.org), rated Aaa/AAA/AAA/AAA (Moody’s/S&P/Fitch/Japan Credit Rating, all stable), has launched and priced a USD 2 billion 5-year Global Benchmark bond due March 14, 2028, its first of the year. The bond was issued on 7 March.
With this issue, the African Development Bank continues to carry out its funding strategy of 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 orderbook 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 on Monday 6, March at 09:07 London time with Initial Pricing Thoughts (IPTs) released at mid-swaps plus 35bp (basis points) area at 12.34 London time.
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The deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest (IoI) reaching USD 2.1 billion by the time books officially opened on Tuesday 7, March 2023 at 07:57 London time. The orderbook 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 orderbook 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 trade officially priced at 5.58 pm London time at SOFR mid-swaps plus 33bps, equivalent to a reoffer yield of 4.435% and a spread of 14.3bp vs the on-the-run 5-year US Treasury.
With the final orderbook closing in excess of USD 3.5 billion with more than 90 orders, the success of this 5-year transaction is a clear vote of confidence from investors in the Bank’s AAA credit.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry