In what it described as its maiden benchmark transaction for the year, the African Development Bank (AfDB) says it has successfully priced a €1bn 10-year Global Benchmark, due 21 March 2029.
The transaction which marks the bank’s s positioning in the EUR market, in line with its strategy of building a reference curve, was oversubscribed with an order book in excess of €1.7bn, diversified across geographies and investor profiles. With nearly 50 investors participating, the transaction, which follows its inaugural EUR benchmark issued in 2016, was priced Thursday March 14, 2019.
A statement by AfDB said its efforts in marketing are truly bearing fruit with the largest EUR order book achieved to date, underlining the issuer’s access to EUR liquidity with no concession and the intrinsic demand for the name within the European investor base.
The high quality of the order book is illustrated by the strong participation of Central Banks and Official Institutions, the statement added.
Taking advantage of the positive market backdrop and a clear issuance window, the Bank announced the transaction on Wednesday 13 March at 11:30am London time. The following morning, the market opened with a constructive tone and Initial Price Thoughts (IPTs) of mid-swaps – 1bp area were released at 8:25am London time.
Momentum was strong from the outset. Indications of Interest (IOIs) accumulated at a good pace and by 9:55am London time, IOIs were in excess of €1.1bn (excluding Joint-Lead Managers (JLM) interest).
This allowed the issuer to revise price guidance to mid-swaps – 2bps area and officially set the deal size at €1bn. Investor interest continued to build throughout the European morning.
With an order book exceeding €1.7bn (excluding JLM interest), the issuer was able to set the spread at mid-swaps – 3bps at 11:30am London time with the order book set to close 30 minutes later at 12:00pm London time. The transaction was priced at 3:04pm London time with a re-offer yield of 0.557%, equivalent to a spread of 47.9bps vs. DBR 0.25% February 2029.
“We have been focused on building a strong investor base and a solid curve in Euro since our first foray in that market three years ago, and our approach has been met with success. We offer rarity, triple- A strength, performance, and a mandate to combat poverty and improve lives on the African continent.” Hassatou N’Sele, Treasurer of the African Development Bank Group.