AfDB launch $2bn global benchmark bond
The African Development Bank (AfDB) has launched and priced a US$ 2 billion 5-year Global Benchmark bond due 14 March 2028, its first of the year.
The bond was issued on 7 March.
With this issue, the African Development Bank continues to carry out its funding strategy of issuing large liquid benchmark transactions and adds another on-the-run reference in the 5-year maturity while extending its outstanding USD curve.
With the final orderbook closing in excess of US$3.5 billion and 95 investors participating, the African Development Bank set the size of the transaction at US$2 billion. The issue garnered interest from top quality investors with particularly good demand from Central Banks / Official Institutions.
The bank’s 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 35bp (basis points) area at 12.34 London time.
The deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest (IoI) reaching US$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 US$3.5 billion by 10:28 London time, which allowed the spread to be tightened by 2bps 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 US$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.
With the final orderbook closing in excess of US$3.5 billion with more than 90 orders, the success of this 5-year transaction is a clear vote of confidence from investors in the bank’s AAA credit.
