New Telegraph

AfDB launches $2.5bn global benchmark bond

The African Development Bank (AfDB) has launched and priced a $2.5 billion five-year Global Benchmark bond due 23 March,pqppqlql1 ll 2026, its first $ benchmark of the year, the lender has announced. In a statement,

 

it said: “The new transaction represents AfDB’s largest five-year $ Global Benchmark ever issued, as well as its largest orderbook achieved for a 5-year benchmark transaction.

 

With the final orderbook closing in excess of $3.6 billion (excluding Joint Lead Managers (JLM) interest), and 72 investors participating, the success of this five-year transaction is a clear vote of confidence from investors in AfDB’s AAA credit. “Global asset managers and bank treasuries were key contributors to the strong dynamic of the transaction and played a key role in its success, illustrating their solid partnership with the AfDB.

 

“The AfDB’s mandate for a five-year Global Benchmark was announced on Monday 15 March, at 12.04pm London time with Initial Pricing Thoughts (IPTs) released at mid-swaps + 6 basis points (bps) area. The deal enjoyed robust investor demand from the outset as Indications of Interest (IOIs) from AfDB’s high quality investor base accumulated at a rapid pace, exceeding $2.4 billion (excluding JLM interest) overnight.

 

“Books officially opened the following morning Tuesday 16 March 16, at 8.09am London time. Off the back of the large and high-quality IOIs, price guidance was revised to mid-swaps + 5bps area.

 

The orderbook continued to grow throughout the morning, with investor demand approaching $3.4 billion by 10.50am London time, which allowed to set the spread at mid-swaps + 5bps. This level represents a new issue concession of only 1bp versus estimated fair value.

 

At 2.06pm London time, the quality of the orderbook allowed the transaction to be launched with a size of $2.5 billion, as the final orderbook closed in excess of $3.6 billion (excluding JLM interest).

 

Shortly thereafter at 3.37pm London time, the transaction officially priced at mid-swaps + 5bps, equivalent to a reoffer yield of 0.949 per cent and a spread of 13.5bps vs the onthe- run 5-year US Treasury.” Commenting on the transaction, Group Treasurer, AfDB, Hassatou Diop N’Sele, said: “This is our largest fiveyear dollar benchmark transaction, and its success reflects the strong interest from our growing investors across the globe for the Bank’s credit story and the quality of its transactions.”

 

Analysts note that the transaction is yet another demonstration of AfDB’s extremely broad and highquality investor base, with the bond well allocated across different geographies and investor types. Specifically, accounts from the Americas received 50 per cent of allocations, Europe 36 per cent,

 

Asia 10 per cent while investors from Africa and Middle East rounded out the remainder of the book with four per cent of the allocations. By investor type, asset managers/insurance/ pension funds led the book with 37 per cent of allocations, followed by banks with 36 per cent, while central banks/official institutions took 27 per cent.

Read Previous

GMW2021: Boosting youths’ financial awareness for devt

Read Next

Anchor Insurance, DOSP empower youths with free theatre clinic

Leave a Reply

Your email address will not be published. Required fields are marked *