With the final orderbook closing in excess of USD 3.5 billion and 95 investors participating, the African Development Bank set the size of the transaction at USD 2 billion
The African Development Bank, rated Aaa/AAA/AAA/AAA (Moody’s/S&P/Fitch/Japan Credit Rating, all stable), on March 7, 2023, launched its first of the year Global Benchmark bond, priced a 5-year US$2bn instrument due March 14, 2028, as part of its funding strategy of issuing large liquid benchmark transactions.
The bond, with final orderbook closing in excess of USD 3.5bn, almost double the target size of US$2bn, adds another on-the-run reference in the five-year maturity, while extending its outstanding USD curve. The issue garnered interest from 95 participating top quality investors with particularly good demand from Central Banks/Official Institutions.
The bank said in a statement said the mandate for a 5-year USD Global Benchmark was announced on Monday 6, March at 09:07 London time with Initial Pricing Thoughts (IPTs) released at mid-swaps plus 35bp (basis points) area at 12.34 London time.
According to the statement, “the deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest (IoI) reaching USD 2.1bn by the time books officially opened on Tuesday 7, March 2023 at 07:57 London time.
“The orderbook continued to grow throughout the European morning, with investor demand equaling USD 3.5 billion by 10:28 London time, which allowed the spread to be tightened by 2bps and set at SOFR mid-swaps + 33bps.
“Shortly thereafter, at 12:54 London time, the high quality orderbook allowed the transaction to be launched with a size of USD 2 billion, with Americas books set to go subject at 13:30 London time. The trade officially priced at 5.58 pm London time at SOFR mid-swaps plus 33bps, equivalent to a reoffer yield of 4.435% and a spread of 14.3bp vs the on-the-run 5-year US Treasury,” the statement added.
The success of this 5-year transaction, the AfDB stressed, “is a clear vote of confidence from investors in the Bank’s AAA credit.”
The re-offer price is 99.734%; while re-offer yield, 4.435%; Lead Managers of the offer are: Barclays, Crédit Agricole CIB, Deutsche Bank, J.P. Morgan, TD Securities; and Co-Lead Manager, CastleOak Securities.