The launch marked the bank’s return to the Australian dollar
bond market.
The transaction, announced on 8 June, was led by Nomura and
RBC Capital Markets.
It is the institution’s first benchmark Kangaroo since early
2018 and its first in the mid-curve since 2015.
It is also the largest AUD trade ever issued by the Bank.
More than 30 investors participated in the deal, with a
total order book of more than A$775 million, leading to an upsize of the trade
from the announced size of A$250-300 million to the final size of A$600
million.
These included a strong cohort of Australian investors,
while fund managers were the major investor type.
AFDB Treasurer Hassatou N’sele said the Covid-19 pandemic
had led to a rise in global issuances of social bonds.
“Following on from the ground breaking USD$3.1 bln 3 year
‘Fight Covid-19’ Social Bond we issued in 2020, we’re glad to see that public
domestic markets, like the Kangaroo bond market, are now seeing similar
development in terms of interest from dedicated ESG investors, which provided
additional momentum enabling us to print the largest trade we’ve ever done in
AUD”.
The AfDB’s social bonds have use of proceeds allocated to
projects that alleviate or mitigate social issues such as improving access to
electricity, water and sanitation, and improving livelihoods through flood-risk
reduction and access to clean transportation and employment generation.
Recent KangaNews (https://bit.ly/3cBzhpt) data show that the
AFDB had A$1.75 billion of bonds mature between its 2015 benchmark deal and its
most recent.
Keith Werner, Manager of Capital Markets and Financial
Operations, said 38 per cent of investors in the deal had a socially
responsible investment approach.
He said the AFDB intends to issue more social bonds in
Australian dollars.
The Australian dollar is the fifth currency in which the
African Development Bank has issued social bonds since it established the
program in 2017.
This following deals in euros, US dollars, Norwegian kroner
and Swedish kronor.
In December 2016, the AfDB launched its inaugural Kangaroo
Green Bond.
This transaction followed successful outings in USD and SEK
Benchmark formats.
A Kangaroo bond is a foreign bond issued in the Australian
market by non-Australian firms and is denominated in Australian currency.
The bond is subject to the securities regulations of
Australia.
A Kangaroo bond is also known as a “matilda bond.”