On Wednesday, January 16, 2013, the African Development Bank (AfDB), rated Aaa/AAA/AAA, priced a $1 billion fixed rate US Dollar Global benchmark due March 15, 2018.
The transaction pays a coupon of 0.875 per cent and a spread of five basis points over Mid-Swaps, equivalent to 20.45 basis points over the UST 0.75 per cent due December 31, 2017. Joint Lead Managers on the transaction are BNP Paribas, Deutsche Bank, J.P. Morgan and Nomura.
In terms of spreads to Treasuries, this is the tightest ever transaction executed by the Bank and reflects strong investor demand for top quality US Dollar denominated supranational product.
Indications of interest were collected into the U.S. afternoon on January 15 and overnight in the Asia time zone. Strong interest from Central Banks early in the process helped to create momentum within the order book. Early in the London morning on Wednesday, January 16, the order book officially opened and the transaction was priced the same afternoon at Mid-Swaps plus five basis points in line with initial pricing thoughts.
The order book of participating investors was of exceptional quality with many first time investors. The main drivers of the transaction were Central Banks/official institutions at 75 per cent with asset managers at 10 per cent, banks at nine per cent and corporates at six per cent.
The geographical distribution was well balanced with Asia and Americas at 31 per cent and 30 per cent, respectively, followed by Europe at 20 per cent and Middle East and Africa at 19 per cent.
The success of the transaction is a testimony to the AfDB's AAA ratings and the investor following built up through regular investor relations work over the years.