The African Development Bank has launched and priced a $2.75 billion 5-year Global Benchmark bond due 22 July 2026, its second of the year. With this latest issue, the African Development Bank continues to carry out its funding strategy of issuing large liquid benchmark transactions and adds another on-the-run reference in the 5-year maturity while extending the Bank’s outstanding USD curve. A statement from the bank noted that with the final order book closing in excess of $4.2 billion and 82 investors participating, the Bank set the size of the transaction at $2.75 billion.
“The issue garnered interest from top-quality investors, with particularly good demand from central banks and official institutions,” said AfDB. The Bank’s mandate for a 5-year USD Global Benchmark was announced on Wednesday 14 July at 1.00pm London time with Initial Pricing Thoughts (“IPTs”) released at mid-swaps +3 basis points (bps) area. The transaction was met with strong interest from the outset and resulted in record Indications of Interest (“IOIs”), in excess of $2.9 billion, by the time books opened on Thursday at 8.00am London time.
This allowed the Bank to tighten guidance by 1bp to mid-swaps +2bps area. Demand continued to grow during the European morning and late Asian session, with investor interest exceeding $3.9 billion by 10.50am London time, allowing the Bank to further tighten and set the spread at mid-swaps +1bp. The high quality of the order book and limited price sensitivity allowed the Bank to tighten the pricing by 2bps throughout the execution process and achieve the tightest spread vs US Treasuries from a 5-year supranational or agency in 2021.