AfDB unveils $2bn second Global Benchmark of 2019

The African Development Bank has unveiled and priced a USD 2 billion 3-year Global Benchmark bond due 16 September 2022, its first USD benchmark of the year.

The bond has been launched on September 11. It is the African Development Bank's (AfDB) second Global Benchmark of 2019, following a EUR 1 billion 10-year priced in March 2019. With this transaction, AfDB has now raised USD 4.4 billion in 2019 to date and executed 61 percent of its borrowing program for the year. The transaction received strong support from investors globally, with order books reaching USD 2.8 billion and 53 investors participating. The high quality of the order book is illustrated by the strong participation of Central Banks and Official Institutions, taking 64 percent of the allocations.

The AfDB was on the opinion to take advantage of favorable investor sentiment post summer break to access the 3-year tenor, despite the volatile market conditions ahead of the Fed Meeting the following week. The mandate was announced on September 10, at 12:00 London time with Initial Pricing Thoughts of Mid-Swaps + 13 basis points (bps) area.

The transaction met strong interest from the outset, with Indications of Interest in excess of USD 1.8 billion (excluding Joint-Lead Managers interest) when order books officially opened at 08:00 London time the following morning, with initial price guidance of Mid-Swaps + 13bps area.

Momentum continued throughout the European morning, with orders in excess of USD 2.5 billion around 11:20 London time. At this time, final pricing was set at Mid-Swaps + 13bps. Following the close of the order book in the US, the size of the transaction was set at USD 2 billion by 14:20 London time.

The transaction was priced at 16:24 London time with a re-offer yield of 1.679%, equivalent to a spread of 8.75bps vs UST 1.5 percent 15 September 2022, the issuer's tightest print vs US Treasuries to date.

"We are delighted with this successful dollar Global Benchmark, and particularly pleased by both the very high quality of the order book and the solid participation of African Central Banks. The African Development Bank achieved its tightest ever spread to US Treasuries, and we are grateful to our investors across the world for this outcome, and the financing it will bring to the African continent," the Group Treasurer of AfDB, Hassatou Diop N'Sele said.

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