On Wednesday 15 May 2024, the African Development Bank ("AfDB"), rated Aaa/AAA/AAA (Moody's/S&P/Fitch) successfully launched and priced an inaugural EUR 500 million short 4-year Green Benchmark, the second green bond issued under the Bank's new Sustainable Bond Framework, established in September 2023. The bond due March 2028 pays a coupon of 2.875% with a re-offer yield of 2.947%. An amount equal to the net proceeds of the Notes will be used to finance and/or refinance eligible green projects as further described in the Issuer's Sustainable Bond Framework (https://www.afdb.org/sites/default/files/2023/09/12/230912_afdb_sustainable_bond_framework_final.pdf).

This new short 4-year green bond is AfDB's first EUR global benchmark since September 2022 and its inaugural green bond in the EUR market. This issuance takes place during a notably busy week in the EUR SSA markets, witnessing the launch of 6 global benchmarks totaling EUR 18 billion within a span of 3 days.

With the largest ever order book achieved for an AfDB EUR benchmark and an impressive 3 basis points spread tightening from initial price guidance, the success of this green bond transaction is a true testimony of investors' confidence in the AfDB's Sustainable Bond Framework, which builds upon the Bank's strategic commitment to support African countries' transition to green growth and promote low-carbon and climate-resilient development on the continent.

The transaction received strong support from the global investor community with a final order book in excess of EUR 3.2 billion (including EUR 200 million of Joint-Lead Manager (JLM)'s interest) and was oversubscribed 6.4x. Distribution was well diversified globally and by investor types, with 46 investors participating. The green label garnered strong interest from ESG investors, representing 63% of the final order book. The issuance also attracted high-quality investors, including notable involvement from Central Banks and Official Institutions, who represented 60% of the order book.

At 11:10 CET on Tuesday 14 May, AfDB announced a mandate for an inaugural EUR 500 million (Will Not Grow) short 4-year (March 2028) Green benchmark, taking advantage of favourable market conditions and a strong primary market backdrop to launch its inaugural Green Bond on the EUR market.

With the transaction building well in the overnight session, AfDB opened books at 08:58 CET on Wednesday 15 May, with an initial price guidance at Midswaps + 5bps area, inside secondary levels.

On the back of a very fast book building process with strong investor demand, at 10:20 CET, price guidance was revised 3bps tighter and set at Midswaps + 2bps, with orders in excess of EUR 2.7 billion. Books closed at 11:00 CET in excess of EUR 3.2 billion (including EUR 200 million of JLM's interest), despite the price tightening, showing the depth of demand for the transaction.

The transaction was priced at 13:34 CET with a re-offer yield of 2.947%, equivalent to a spread of 39.5bps vs DBR 0.5% 02/15/28 and a spread of 9.7bps vs OAT 0.75% 25/02/2028.

Distribution statistics

The geographical distribution highlights a diversified investor base approximately with the majority of the book from Europe (70%), followed by Africa (16%), Asia (10%) and the Middle East (3%).

In terms of investor type, the high quality orderbook was predominantly allocated to Central Banks & Official Institutions (60%), Bank Treasuries (28%) and Asset Managers / Insurance / Pension Funds (12%).

Bond Summary Terms