AfDB Launches USD 2 Billion 3-Year Social Global Benchmark

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ABIDJAN, Ivory Coast, January 22, 2024 — The African Development Bank (AfDB), with a credit rating of Aaa/AAA/AAA/AAA (Moody’s/S&P/Fitch/Japan Credit Rating, all stable), has announced the successful launch and pricing of a USD 2 billion 3-year Social Global Benchmark due on February 25, 2027. This marks the Bank’s inaugural social bond issuance under its new Sustainable Bond Framework, established in September 2023. The Sustainable Bond Program seamlessly integrates and enhances the existing Green and Social Bond initiatives, enabling the issuance of green bonds, social bonds, and sustainability bonds (https://apo-opa.co/3vMTh5d).

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This 3-year Social Benchmark represents the Bank’s first global benchmark of the year, strategically aligning with the active reopening of primary markets in January 2024. The issuance is a significant highlight amid a dynamic week in the USD SSA markets, witnessing the launch of 8 benchmarks totaling USD 17.25 billion within a span of two days.

In line with its funding strategy, the African Development Bank continues to execute large liquid benchmark transactions, contributing another on-the-run reference in the 3-year maturity. The Bank achieved the tightest pricing among Multilateral Development Banks (MDBs) both versus swaps and US Treasuries.

The issuance garnered strong support from the global investor community, amassing an order book in excess of USD 3.5 billion. High-quality investors, including central banks, official institutions, and bank treasuries, constituted 78% of the book. Distribution was well-diversified across geographies and investor profiles, with 76 orders in the book. Notably, the social label attracted interest from ESG investors, representing 38% of participants in the book.

The mandate for a 3-year USD Global Benchmark was announced on Wednesday, January 17, at 15:00 London time, taking advantage of favorable market conditions and a robust primary market backdrop. The deal’s Initial Pricing Thoughts (IPTs) were released at SOFR mid-swaps plus 33bp (basis points) area. Investor demand was robust, with Indications of Interest (IoIs) reaching USD 2.1 billion by the time books officially opened on Thursday, January 18, at 08:00 London time.

The order book continued to grow, reaching USD 3.6 billion by 10:50 London time, allowing the spread to be tightened by 2bps and set at SOFR mid-swaps plus 31bps. Books closed at 13:00 London time, and the high quality of the order book, exceeding USD 3.5 billion, facilitated the launch of the transaction with a size of USD 2 billion. The trade officially priced at 15:18 London time with a reoffer yield of 4.221%, equivalent to a spread of 10.3bps vs UST 4% Jan-27, marking the tightest print vs UST in the USD SSA primary market so far this year.

The final order book closed in excess of USD 3.5 billion, with more than 70 orders.

Godwin Okafor
Godwin Okaforhttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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