The African Development Bank (AfDB), rated Aaa/AAA/AAA/AAA (Moody's/S&P/Fitch/Japan Credit Rating, all stable), has launched and priced a new USD 2 billion long 3-year Global Benchmark bond due January 04, 2027, its second of the year.

With this issue, the AfDB continues to carry out its funding strategy of issuing large liquid benchmark transactions and adds another on-the-run reference in the 3-year maturity of AfDB's USD curve. With the final orderbook closing in excess of USD 3.3 billion and 73 investors participating, AfDB 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 and Official Institutions.

The AfDB's mandate for a 3-year USD Global SEC-Exempt Benchmark was announced on Monday 20 November at 12:30 London time with Initial Pricing Thoughts (IPTs) released at SOFR mid-swaps + 37bps (basis points) area.

The deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest (IoIs) reaching USD 1.6 billion (excluding Joint-Lean Managers (JLM) interest) by the time books officially opened on Tuesday 21 November at 08:09 London time. The orderbook continued to grow throughout the European morning, with investor demand equaling USD 2.7 billion (excluding JLM interest) by 11:01 London time, which allowed the spread to be tightened by 1bp and set at SOFR mid-swaps + 36bps. Shortly thereafter, at 14:00 London time, the high quality orderbook allowed the transaction to be launched with a size of USD 2 billion. The trade officially priced at 16:22 London time at SOFR mid-swaps + 36bps, equivalent to a reoffer yield of 4.700% and a spread of 12.1bps vs the on-the-run 3-year US Treasury.

With the final orderbook closing in excess of USD 3.3 billion with more than 73 orders, the success of this 3-year transaction is a clear vote of confidence from investors in the Bank's AAA credit.

Investor distribution statistics:

Transaction details:

Issuer:

African Development Bank ("AfDB")

Issuer Rating:

Aaa / AAA / AAA (All Stable)

Size:

USD 2 billion

Pricing Date:

21 November 2023

Settlement Date:

29 November 2023

Maturity Date:

04 January 2027

Coupon:

4.625%

Spread to mid-swaps:

+36bps

Spread to benchmark:

+12.1bps

Re-offer price:

99.790%

Re-offer yield:

4.700%

Lead Managers:

BMO Capital Markets, BNP Paribas, Citi, J.P. Morgan, Wells Fargo

Co-Lead Manager:

CastleOak Securities

ISIN

US00828EEY14

Contact: [email protected]