The African Development Bank (AfDB) has launched and priced a new 1.25 billion euros seven-year Global Benchmark transaction, in a Social Bond format, due Sept. 14, 2029.
The AfDB in in a statement posted on its on Friday, stated
the bond launched on Wednesday, “pays a coupon of 2.250 per cent with a
re-offer yield of 2.310 per cent.”
The new seven-year EUR transaction marks the bank’s second
EUR Global Benchmark in 2022, following the one billion euros five-year
transaction issued in March, extending further the bank’s EUR curve.
Additionally, the new line brings a new liquid and
on-the-run reference point in the seven-year part of AfDB’s EUR curve,
refreshing a key benchmark maturity, which the bank last visited in 2017.
“By issuing social bonds to finance socio-economic
development in its regional member countries, the bank is advancing its mission
and strategy – to spur sustainable economic development and social progress in
Africa – and is capitalising on its strong track-record of financing projects
with strong social impact on the continent.
“The eligible projects to be financed with the proceeds of
this new EUR-denominated Social Bond are expected to lead to poverty reduction
and job creation, as well as inclusive growth across age, gender and geography,
thus improving the quality of life for the people of Africa,” the statement
noted.
It said the AfDB’s mandate for a new seven-year
EUR-denominated Global SEC-Exempt Benchmark was announced on Sept. 6, at 13:00
London time, with the issuer seizing the final clear window available in the
euro market before the European Central Bank’s (ECB) September meeting on
Thursday.
Books officially opened the following morning, on Sept 7, at
8:00 London time with Initial Price Thoughts released at mid-swaps – 2bps
(basis points) area.
Investor demand was robust from the outset with the
orderbook growing in excess of 1.8 billion euros by 9:35 London time,
supporting AfDB’s move to set the spread tighter at mid-swaps -3bps with books
to go subject at 10:30 London time.
The final mid-swap spread implied a new issue concession of
2bps relative to the bank’s EUR curve.
Investor interest, however, continued to grow with the book
closing in excess of 2.3 billion euros with 71 investors participating in the
offering whilst the quality of the book firmly supported the launch of a EUR
1.25 billion transaction.
Notably, at 2.3 billion euros, the deal’s orderbook
represents AfDB’s largest ever book for a EUR benchmark transaction.
Shortly thereafter at 14:10 London time, the transaction
officially priced at mid-swaps -3bps, equivalent to a reoffer yield of 2.310
per cent and a spread of 96.4bps vs. the DBR (Debt Burden Ratio) 0.00 per cent
August 2029 benchmark.
The distribution statistics are as follows: The geographical
distribution highlights a diversified investor base approximately with the
majority of the book from Europe (56.7 per cent), followed by the UK (22.6 per
cent), Asia (12.1 per cent), Americas (8.2 per cent) and Africa (0.4 per cent)
In terms of investor type, the high quality orderbook was
predominantly allocated to banks (40.2 per cent) and Central Banks/Official
Institutions (30 per cent) and whilst Asset Managers / Insurance / Pension
Funds (29.8 per cent), rounded off the remainder of allocations.
Bond Summary Terms are as follows: Issuer is the AfDB with
Issuer Rating as Aaa / AAA / AAA / AAA (All Stable).
Size (of bond)1.25 billion euros and the Pricing Date as of
Sept. 7, 2022; Settlement Date of Sept. 14, 2022; and Maturity Date of Sept.
14, 2029.
A Coupon of 2.250 per cent, Spread to mid-swaps of -3 basis
points, Spread to benchmark of +96.4 basis points, re-offer price of 99.616 per
cent and a re-offer yield of 2.310 per cent.
The Lead Managers are Barclays, Citi, JP Morgan and Société
Générale and the International Securities Identification Number is
XS2532472235. NAN
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