By Christy Animam
With the final orderbook closing in excess of $3.5 billion and 95 investors participating, the African Development Bank (AfDB) set the size of the transaction at $2 billion.
The AfDB, 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 $2 billion 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 $3.5 billion, almost double the target size of $2 billion, 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 35 basis points area at 12.34 London time.
According to a statement, “the deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest (IoI) reaching $2.1 billion 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 $3.5 billion by 10:28 London time, which allowed the spread to be tightened by 2 basis points 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 $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.
