On Tuesday 24 February, the African Development Bank ("AfDB"), rated Aaa/AAA/AAA/AAA (Moody's/S&P/Fitch/ /JCR) successfully priced a new USD 2 billion 5-year Global Benchmark due March 2031, the Bank's second USD benchmark of the year, following a successful USD 1 billion 10-year benchmark priced in January.

Despite current market headwinds, the transaction garnered strong support from the global investor community, enabling the Bank to tighten the bond pricing by 2 basis points (bps) from Initial Pricing Thoughts (IPTs) and achieve a final spread of 4.5bps vs US Treasuries. The final orderbook closed in excess of USD 7 billion, becoming the largest ever orderbook for an AfDB bond issuance.

In addition to attracting a record-breaking USD orderbook--the largest in the Bank's history, the transaction was priced at the tightest spread to US Treasuries ever achieved across all maturities. The issuance also ranks among the tightest 5-year spreads to US Treasuries attained by Sovereigns, Supranationals and Agencies (SSA) issuers.

The issuance attracted high-quality investors with over 110 orders in the book, including Central Banks and Official Institutions (61%), Banks (27%) and Fund Managers (12%). Distribution was well diversified across geographies, with Americas (38%), Asia (33%), Europe (23%) and Africa (6%).

The announcement for the USD 5-year Global Benchmark transaction was released at 13.15 UKT on Monday 23 February, with IPTs at SOFR Mid-swaps + 34bps area (equivalent to 7.5bps vs 5y US Treasury). The transaction received meaningful interest from the outset, and the orderbook grew steadily throughout the day. By 08.20 UKT the following morning, indications of interest surpassed USD 5.75 billion (excluding Joint-Lead Managers (JLM) interest) and the books officially opened with a price guidance of SOFR Mid-swaps + 33bps area, 1bp tighter than IPTs. Despite the spread revision, the momentum continued to grow, and at 10.40 UKT the spread was set at SOFR Mid-swaps + 32bps, another 1bp tighter. Books stood at over USD 7.4 billion (excluding JLM interest) at this stage.

Global books closed at 11.00 UKT with the transaction being priced at 15.13 UKT with a re-offer yield of 3.643%, equivalent to a spread of 4.5bps vs UST 3.750% 31 January 2031. The transaction illustrates AfDB's strong credit recognition, capturing exceptional investor demand amid some geopolitical uncertainties, while achieving attractive pricing and further broadening its diversified global investor base.