The African Development Bank, rated Aaa (Moody's)/AAA(S&P)/AAA(Fitch), has launched and priced its new US$2-billion 5-year Global Benchmark bond, due 20 September 2023.
Launched on September 13, this new deal is the Bank's second US$ benchmark transaction of the year, following the US$2-billion 3-year Global Benchmark priced on March 2018. With its latest issue, the Bank continues to meet its objective of funding strategy to issue large liquid benchmark transactions and extend its benchmark curve.
The Bank has now raised around US$ 6.9 billion and complete 86% of its 2018 funding program so far.
The deal was very well received with books reaching in excess of US$3.4 billion breaking the record for the largest book ever achieved for a 5-year benchmark in the Bank's funding history. More than 90 investors participated in the transaction, including 19 new accounts across the world, demonstrating that the transaction was well placed across diversified geographies and investor type. The high quality of the order book is illustrated by the strong participation of Central Banks and Official Institutions.
The African Development Bank decided to take advantage of the positive market backdrop to issue its second Global Benchmark of the year and be amongst the first issuers to target the 5-year part of the curve post-summer. The Bank announced the mandate on Wednesday, September 12, at 12:15pm London time with Initial Pricing Thoughts (IPTs) of Mid-Swaps (MS) +7basis points (bps) area released simultaneously for gathering Indication of Interest (IOIs) overnight.
The deal rapidly enjoyed a very strong reception from the outset with IOIs in excess of US$2.6 billion. Books officially opened in the European morning at 8:00am London time, with price guidance of MS +6bps area, reviewed to 1 bp tighter than IPTs, reflecting the strong dynamics of the transaction.
Momentum continued to build throughout the European morning, with books exceeding US$3.4 billion shortly after 10:00am London , allowing the Bank to further tighten the price guidance by 1bp and set the spread at MS + 5bps, with books going subject for European and Asian accounts.
After books went subject for US accounts at 2:00pm London / 9: am New York, on the back of extremely high quality orders and with final demand in excess of US$3.2 billon (excluding Joint-Lead Managers interest), the US$ 2 billion transaction was launched at 2:25pm London.
The transaction was priced at 5:18pm London with a re-offer yield of 3.041%, equivalent to a spread of 18.2bps vs CT5 2.750% August 2023.
"We were very pleased with the outcome of this transaction, in particular the extremely strong demand from high quality investors including central banks, as well as the number of new investors that participated. This allowed us to not only tighten our initial pricing, but also execute a transaction with an exceptional performance. The success of this 5-year global benchmark comes on the back of the African Development Bank having been designated the Second Most impressive Social or Sustainability Bond issuer by 'Global Capital' last week." Hassatou Diop N'Sele, Group Treasurer, African Development Bank
Investor distribution statistics:
Transaction details:
Issuer:
African Development Bank ("AfDB")
Issuer rating:
Aaa / AAA / AAA (Moody's / S&P / Fitch)
Amount:
US$2billion
Pricing date:
13 September 2018
Settlement date:
20 September 2018
Coupon:
3.00%, Fixed, Semi-Annual 30/360
Maturity date:
20 September 2023
Re-offer price:
99.811%
Re-offer yield:
3.041% Semi-Annual
Re-offer spread:
Mid-Swaps + 5.0 bps / CT5 +2.750% August 2023 + 18.2 bps
Joint lead managers:
Co-lead Managers:
Barclays, BNP Paribas, Goldman Sachs International, J.P. Morgan, TD Securities
Daiwa, Wells Fargo
ISIN:
US00828EDC03
Contact: fundingdesk@afdb.org
