AfDB Unveils $2.5bn 0.875% 5-year Global Benchmark

The African Development Bank (AfDB), on Friday, launched and priced  US$2.5bn five-year Global Benchmark bond due March 23, 2026, its first US$ benchmark of the year, representing its largest 5-year US$ Global Benchmark ever issued, as well as its largest order book achieved for such benchmark transaction.

In all, final order-book closed in excess of $3.6bn (excluding Joint Lead Managers (JLM) interest), with 72 investors participating, a success level the bank says is a clear vote of confidence from investors in AfDB’s AAA credit rating.

A statement by Hassatou Diop N’Sele, its Group Treasurer, appreciated the key contributions of global asset managers and bank treasuries to the strong dynamic of the transaction, illustrating their solid partnership with the group.

The mandate for a five-year US$ Global Benchmark was announced on Monday March 15, at 12.04pm London time with Initial Pricing Thoughts (IPTs) released at mid-swaps + 6 basis points (bps) area.

The deal, the statement continued, 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 $2.4bn (excluding JLM interest) overnight.

“Books officially opened the following morning Tuesday, March 16, at 8.09 am London time. Off the back of the large and high-quality IOIs, price guidance was revised to mid-swaps + 5bps area. The order book continued to grow throughout the morning, with investor demand approaching $3.4bn by 10.50 am 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).”

Continuing, the statement recalled that shortly thereafter at 3.37pm London time, the transaction officially priced at mid-swaps + 5bps, equivalent to a reoffer yield of 0.949% and a spread of 13.5bps vs the on-the-run 5-year US Treasury.

“This is our largest 5-year 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,” the bank stressed further.

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