African Development Bank Launches £1 Billion 3.75% Global Benchmark due January 2029

African Development Bank Launches £1 Billion 3.75% Global Benchmark due January 2029

On Wednesday 7^th January, the African Development Bank (“AfDB”), rated Aaa/AAA/AAA (Moody’s/S&P/Fitch) successfully priced a new GBP 1 billion 3-year Global Benchmark. Taking advantage of a very strong market with excellent momentum, this transaction marked the successful return of the Bank to the GBP market.

The new GBP Jan-2029 benchmark strategically extends AfDB’s GBP curve and attracted significant interest from a broad range of domestic and international investors. The high-quality, granular orderbook closed in excess of GBP 2.3 billion (including GBP 70 million Joint-Lead Managers (JLM) interest) from more than 50 accounts, enabling AfDB to print a GBP 1 billion transaction, the largest ever transaction in the GBP market for AfDB.

Against a very supportive market backdrop, the Bank announced a new GBP Global Benchmark due January 2029 at 8.50am UKT. Books opened at this time with initial price guidance of SONIA Midswaps (MS) +35 basis points (bps) area.

Investor demand was strong from the outset, with high-quality orders surpassing the GBP 1.5 billion mark (including JLM interest) by 10.30am UKT. Reflecting the strong shape of the orderbook, the spread was set at SONIA MS +34bps, while keeping the transaction size open to allow flexibility in terms of final issue size. The orderbook continued to grow, closing in excess of GBP 2.3 billion (including GBP 70 million JLM interest) at 11.15am UKT. The excellent quality orderbook and 2.3x oversubscription allowed AfDB to set the issue size at GBP 1 billion,

In terms of investor types, bank treasuries accounted for the largest share of allocations at 66%, underscoring their strong support. Central Banks and Official Institutions represented 26% of the orderbook, highlighting the appeal to sovereign and policy driven investors. The remaining 8% was taken up by Fund Managers and other participants, adding further diversification to the investor profile.

The transaction officially priced at 2.00pm UKT, offering an annual coupon of 3.750%, an annual yield of 3.835% and a spread of +15.2bps against the UKT 0 ½ Jan-29. This very successful transaction demonstrates AfDB’s ability to move quickly and capture the significant liquidity available in the Sterling market observed so far this year, while expanding its investors base.