AfDB Unveils US$2bn 1.625% Bond Due September 16, 2022

The African Development Bank (AfDB), on Friday, announced the launch and pricing, two days earlier, of its US$2bn 3-year Global Benchmark bond due September 16, 2022, its first US$ benchmark this year.
The bond issue, which is the bank’s second Global Benchmark of 2019, following a EUR1bn 10-year priced in March 2019, brings to US$4.4bn this total amount raised year to date. It also raises the executed borrowings so far by AfDB under its programme for the year to 61%.
A statement by the bank said the transaction received strong support from 53 participating global investors, with order books reaching US$2.8bn, adding that “the high quality of the order book is illustrated by the strong participation of Central Banks and Official Institutions, taking 64% of the allocations.”
The bank said it “decided to take advantage of favorable investor sentiment post-summer break, to access the three-year tenor, in spite of volatile market conditions ahead of the Fed meeting the following week.”
The mandate was announced on Tuesday, September 10, at 12:00 London time with Initial Pricing Thoughts of Mid-Swaps +13 basis points (bps) area.
Continuing, AfDB said the transaction received strong interests from the outset, with Indications of Interest in excess of US$1.8bn (excluding Joint-Lead Managers interest) when order books officially opened at 08:00 London time the following morning, with initial price guidance of Mid-Swaps + 13bps area.
Momentum, it stressed, continued throughout the European morning, with orders in excess of US$2.5bn around 11:20 London time. At this time, final pricing was set at Mid-Swaps + 13bps. Following the close of the order book in the US, the size of the transaction was set at US$2bn by 14:20 London time.
The transaction was priced at 16:24 London time with a re-offer yield of 1.679%, equivalent to a spread of 8.75bps vs UST 1.5% 15 September 2022, the issuer’s tightest print vs US Treasuries to date.
Commenting, Hassatou Diop N’Sele, AfDB’s Group Treasurer, expressed delight at “this successful dollar Global Benchmark and particularly pleased by both the very high quality of the order book and the solid participation of African Central Banks. The African Development Bank achieved its tightest ever spread to US Treasuries, and we are grateful to our investors across the world for this outcome, and the financing it will bring to the African continent.”