AfDB issues global benchmark bond of $ 2 billion for 5 years
The African Development Bank, rated triple AAA by the international rating agencies Moody's, S & P and Fitch, has proceeded with a new benchmark bond of $ 2 billion to five years, which will expire on September 20, 2023, with a coupon of 3%.
This new transaction is the Bank's second overall dollar benchmark for 2018, following the $ 2 billion 3-year benchmark bond issue in March 2018 . With this new bond, the Bank is pursuing the strategy of its borrowing program to carry out larger and more liquid transactions.
The African Development Bank has raised approximately $ 6.9 billion in capital markets to date, representing 86% of its borrowing program for 2018. The transaction has been very positively received with a higher order book. $ 3.4 billion and breaking the historical record of the largest order book ever achieved by the Bank for a global reference obligation of 5 years.
More than 90 investors participated in the transaction, including 19 new global investors, reflecting a geographically diversified investment by type of investor. The exceptional quality of the order book is illustrated by the strong participation of central banks and official institutions.
The African Development Bank has chosen to take advantage of a positive market environment and widening swap spreads to issue its second benchmark of the year and be among the first issuers to target the 5-year the post-summer curve. The Bank announced the mandate on Wednesday 12 September at 12:15 London time, with an initial price indication around mid-swap plus 7 basis points, collecting overnight indications of interest.
The transaction was very quickly and favorably welcomed from the start by investors with indications of interest exceeding $ 2.6 billion. The order book officially opened at 8:00 am London time, with an indicative issuance price at mid-swap plus 6 basis points, revised to 1 basis point below the initial price indication, reflecting the strong growth of the transaction.
Momentum continued through the morning with a book order exceeding 3.4 billion dollars shortly after 10 am London time, allowing the Bank to tighten the issue price to 1 basis point and set the mid-swap spread plus 5 basis points, with orders from European and Asian accounts.
After the issuance of orders by US accounts at 14:00 London time, with a very high order book and a final demand of more than $ 3.2 billion (excluding the interests of the leaders) , the $ 2 billion transaction was finally launched at 2:25 pm London time.
The final execution of the transaction took place at 17:18 London time, with a return of 3.041%, equivalent to a margin of 18.2 basis points over the Treasury bond. US 5-year maturity (CT5), 2.75% maturity August 2023.
"We are delighted by the interest in this benchmark bond issue, particularly the strong demand from quality investors, including central banks, as well as the commitment of many new investors to invest. this operation. We have been able to tighten our starting price, and this bond is now enjoying a very good performance in the secondary market. The success of this five-year benchmark comes a week after the African Development Bank was awarded the title of "Second most impressive issuer of corporate bonds or sustainable bonds" "- Hassatou Diop N'Sele , Treasurer of the African Development Bank Group.
