Transaction Highlights:
On Thursday, 24th November 2016, the African Development Bank (AfDB) launched a new SEK Green Bond transaction. The transaction is AfDB's first Green Bond issuance since the USD 500 million 3-year Green Bond issued in December 2015 and marks AfDB's third appearance in the SEK Green Bond market after having issued two Green Bond transactions in early 2014.
The transaction has a 5.5-year maturity matched to the Swedish Government Bond (SGB 1054) and was priced at 5-year mid-swaps +15bps, equivalent to a yield of 0.413% and a spread of 59bps over the SGB 1054 at time of pricing.
The orderbook reflected the high quality and support for AfDB Green Bonds from Swedish investors, which accounted for the bulk of the transaction (98%).
The new bond is AfDB's fifth Green Bond transaction under its new Green Bond Framework: http://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/green-bond-program/
Nordea Markets was the sole lead manager for the transaction.
"We are very pleased by the strong interest received from Swedish green bond investors on the AfDB climate finance actions and strategy and thank them for their participation. This is our third transaction in the Swedish green bond market and this bond will support our commitment to help the African continent gradual transition to green growth." - Hassatou N'Sele, Treasurer, African Development Bank.
"It was great to be back in the SEK market for the first time since our inaugural trades in 2014. We had strong support from Swedish investors in our earlier trades and I was gratified to see this was the case once again. This issuance will allow us to continue to fulfill our development mandate in Africa with a focus on sustainability by financing projects with either a climate adaptation or mitigation component on the continent." - Keith Werner, Chief Treasury Officer, African Development Bank.
"This is a strong print from a strong issuer. We are delighted to see the successful outcome of the transaction and further proud that the African Development Bank chose to work solely with Nordea for their third consecutive SEK Green bond. The fact that AfDB was able to return to the SEK market in size after a period of almost three years absence proves that the issuer continues to enjoy a strong reputation amongst SEK investors." - Jacob Michaelsen, Head of Sustainable Bonds at Nordea.
Bond Terms Summary:
Issuer
African Development Bank
Rating
Aaa/AAA/AAA (All Stable)
Issue Amount
SEK 1,250,000,000
Issue Date
24 November 2016
Settlement Date
1 December 2016
Maturity Date
1 June 2022
Coupon
0.375%, Fixed, Annual, 30/360
Reoffer Price
99.794 %
Reoffer Yield
0.413%
Format
Issued off the Issuer's Global Debt Issuance Facility
Use of Proceeds
Eligible projects according to AfDB's Green Bond framework
ISIN
XS1527751991
Settlement
Euroclear / Clearstream
Listing
Luxembourg Stock Exchange
Lead Manager
Nordea Markets
African Development Bank in Brief:
The African Development Bank (AfDB) Group is the premier development finance institution in Africa with a mandate to spur sustainable economic development and social progress in the continent, thereby contributing to poverty reduction. The Bank Group achieves this objective by mobilizing and allocating resources for investment in the continent; and providing policy advice and technical assistance to support development efforts. The African Development Bank's authorized capital of around USD 100 billion is subscribed to by 80 member countries made up of 54 African countries and 26 non-African countries.
The African Development Bank's Strategy for 2013-2022 (Ten-Year Strategy) reflects the aspirations of the entire African continent and is firmly rooted in a deep understanding and experience of how far Africa has come in the last decade, and where it wishes to go to in the next. In 2015 a new strategic operational agenda was laid out for the Bank, outlined in the "High 5s", aimed at providing a sharp focus on the Bank Group's work as it implements the Ten-Year Strategy. The High 5s are to: Light up and Power Africa; Feed Africa; Integrate Africa; Industrialize Africa; and Improve the Quality of Life for the People of Africa. These operational priorities are consistent with the Sustainable Development Goals and therefore essential in transforming the lives of the people of Africa through rapid, sustained, and inclusive growth. An amount equal to the net proceeds of AfDB's Green Bonds is initially allocated to a sub-portfolio within the Treasury's liquidity portfolio. As and when eligible projects begin to disburse, Green Bond proceeds in the liquidity portfolio are then allocated to the loan pools containing the disbursing green projects.
Typical eligible projects include, but are not limited to, greenfield renewable energy generation, biosphere conservation projects, water supply and access, solid waste management as well as energy efficiency projects. Ongoing projects financed by AfDB Green Bond proceeds include:
Africa's largest solar power plant (160 MW), Ouarzazate I, in Morocco
Itezhi Tezhi 120 MW hydro generation project in Zambia
ONEE Integrated 1100 MW wind/hydro power plant in Morocco
Eskom Sere 100 MW wind farm in South Africa
Cabeólica 25.5 MW wind power plant in Cape Verde
For further information, please contact:
African Development Bank
Nordea Markets Nordea Markets
Peter Dalmalm Kamal Grossard-Amin
Head of Nordea Markets, Sweden Head of SSA Origination
+46 8 614 94 11 +45 3333 1975
