On Tuesday 3rd June, the African Development Bank ("AfDB"), rated Aaa/AAA/AAA (Moody's/S&P/Fitch) successfully priced a dual tranche comprising a new USD 2 billion 3-year Global Benchmark and a new USD 1 billion 10-year Global Benchmark. This transaction represents the Bank's first ever dual tranche and its inaugural 10-year USD Global Benchmark.

The dual tranche transaction benefitted from a strong reception amidst a busy primary market, with oversubscription recorded at 2.9x on the 3-year tranche and 5.1x on the 10-year tranche. With a combined order book of USD 10.8 billion, it is the largest achieved by the AfDB for a 3-year USD transaction with a final book in excess of USD 5.7 billion.

The transaction received strong support from the global investor community, allowing the Bank to achieve a final spread of 6.55bps vs UST on the 3-year tranche, the tightest ever for an AfDB USD 3-year transaction and the tightest for any Supras, Sovereign and Agencies (SSAs) issuer in 2025 to date.

Investor distribution was well diversified across geographies with over 70 allocated orders on each tranche. The inaugural 10-year tranche attracted a total of 110 orders (compared to 102 for the 3-year tranche) and saw 69.5% participation from Central Banks/Official Institutions vs 39.2% for the 3-year tranche.

The high-quality of the order book is further underscored by the strong participation of Bank Treasuries, which along with the Central Banks/Official Institutions accounted for 90% of the 3-year tranche and 85% of the 10-year tranche, reflecting strong investor confidence in the African Development Bank's long-term creditworthiness and enduring appeal among USD investors.

Transaction Execution

• With a busy USD pipeline, the transaction for this new USD dual tranche was announced earlier than usual at 10.00 UKT on Monday June 2, with Initial Pricing Thoughts (IPTs) released at SOFR Midswaps +35bps area (equivalent to CT3 +9bps) for a USD 3-year Global Benchmark and SOFR Midswaps +65bps area (equivalent to CT10 +12bps) for a USD 1 billion (Will Not Grow) 10-year Global Benchmark.
• The transaction met with strong investor demand from the outset. By 08.10 UKT the following morning, Indications of Interest (IOIs) stood at over USD 3.7 billion for the June-2028 and USD 2.4 billion for the June-2035. This enabled the African Development Bank to officially open books with initial price guidance revised 1 basis point tighter than IPTs on both tranches at SOFR Midswaps +34bps area for the 3-year and SOFR Midswaps +64bps area for the 10-year. At this point, the size of the 3-year transaction was set at USD 2 billion and communicated to the market.
• The order book continued to grow, and at 10:41 UKT, the final spread was set a further 1bp tighter at SOFR Midswaps +33bps on the 3-year tranche, and unchanged at SOFR Midswaps +64bps on the 10-year tranche. Books closed in excess of USD 5.7 billion and USD 5.1 billion respectively for the 3-year and 10-year tranche.
• Books were closed at 11.00 UKT in EMEA/Asia and 13.30 UKT in the US.
• The transaction was priced at 16.27 UKT for the 3-year tranche with a re-offer yield of 3.875%, equivalent to a spread of 6.55bps vs UST 3.75% 15 May 2028 and subsequently at 16.29 UKT for the 10-year tranche with a re-offer yield of 4.5%, equivalent to a spread of 11.7bps vs UST 4.25% May-2035.

Investor Distribution