AfDB Unveils Groundbreaking $2 Billion Social Global Benchmark


ABIDJAN, Ivory Coast – January 22, 2024 -* In a pioneering move to bolster sustainable development initiatives, the African Development Bank (AfDB) has launched a USD 2 billion 3-year Social Global Benchmark. This marks the bank’s foray into social bonds under its newly established Sustainable Bond Framework, designed to seamlessly consolidate its Green and Social Bond programs.

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Strategic Market Alignment

The 3-year Social Benchmark is a strategic response, aligning with the robust reopening of primary markets in January 2024. As the AfDB’s first global benchmark of the year, this issuance stands out amidst the dynamic week in the USD SSA markets, witnessing the launch of eight benchmarks totaling USD 17.25 billion in just two days.

Success Amidst Strong Support

With a solid commitment to its funding strategy, the AfDB successfully secured the tightest pricing among Multilateral Development Banks (MDBs), both against swaps and US Treasuries. The issuance received overwhelming support from the global investor community, amassing an order book exceeding USD 3.5 billion.

High-quality investors, including central banks, official institutions, and bank treasuries, comprised 78% of the book. Notably, the social label attracted considerable interest from ESG investors, constituting 38% of participants in the book.

Market Dynamics and Successful Pricing

The mandate for the 3-year USD Global Benchmark was announced on January 17, taking advantage of favorable market conditions. Initial Pricing Thoughts (IPTs) were released at SOFR mid-swaps plus 33bp. The deal enjoyed robust investor demand, with Indications of Interest (IoIs) reaching USD 2.1 billion before books officially opened.

The order book continued to grow, reaching USD 3.6 billion, allowing for a spread tightening by 2bps. The transaction 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. This marks the tightest print vs UST in the USD SSA primary market in 2024.

Transaction Details:

  • Issuer: African Development Bank (“AfDB”)
  • Issuer Rating: Aaa / AAA / AAA / AAA (Moody’s/S&P/Fitch/Japan Credit Rating, all stable)
  • Size:USD 2 billion
  • Pricing Date: 18 January 2024
  • Settlement Date: 25 January 2024
  • Maturity Date: 25 February 2027
  • Coupon: 4.125%, Semi-Annual 30/360
  • Re-offer Price: 99.721%
  • Re-offer Yield:4.221%
  • Lead Managers: BNP Paribas, BofA Securities, Credit Agricole CIB, J.P. Morgan, Nomura
  • Co-Lead Manager:CastleOak Securities

This landmark transaction showcases the AfDB’s commitment to sustainable finance, reinforcing its pivotal role in driving positive change in the global financial landscape.

Editorial Staff
Editorial Staff
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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