ENUGU, Nigeria (VOICE OF NAIJA)- The African Development Bank (AfDB), has launched and priced a new USD 2 billion long 3-year Global Benchmark bond due 4 January, 2027, its second of the year.
The AfDB rated Aaa/AAA/AAA/AAA (Moody’s/S&P/Fitch/Japan Credit Rating, all stable).
The AfDB with this issue, continues to carry out its funding strategy of issuing large liquid benchmark transactions and adds another on-the-run reference in the 3-year maturity of AfDB’s USD curve.
With the final orderbook closing in excess of USD 3.3 billion and 73 investors participating, AfDB set the size of the transaction at USD 2 billion. The issue garnered interest from top quality investors with particularly good demand from Central Banks and Official Institutions.
The AfDB’s mandate for a 3-year USD Global SEC-Exempt Benchmark was announced on Monday 20 November at 12:30 London time with Initial Pricing Thoughts (IPTs) released at SOFR mid-swaps + 37bps (basis points) area.
The deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest (IoIs) reaching USD 1.6 billion (excluding Joint-Lean Managers (JLM) interest) by the time books officially opened on 21 Tuesday November at 08:09 London time.
This is even as the orderbook continued to grow throughout the European morning, with investor demand equaling USD 2.7 billion (excluding JLM interest) by 11:01 London time, which allowed the spread to be tightened by 1bp and set at SOFR mid-swaps + 36bps. Shortly thereafter, at 14:00 London time, the high quality orderbook allowed the transaction to be launched with a size of USD 2 billion.
Officially, the trade priced at 16:22 London time at SOFR mid-swaps + 36bps, equivalent to a reoffer yield of 4.700% and a spread of 12.1bps vs the on-the-run 3-year US Treasury.
With the final orderbook closing in excess of USD 3.3 billion with more than 73 orders, the success of this 3-year transaction is a clear vote of confidence from investors in the Bank’s AAA credit.