AfDB issues 1% US $1 Billion Global Benchmark due 2 November 2018

AA – On Wednesday, October 19, 2016, the African Development Bank, rated Aaa (Moody’s) / AAA (S&P) / AAA (Fitch), launched and priced a new US $1-billion 2-year Global benchmark transaction due 2 November 2018.

The new 2-year issue is AfDB’s fifth USD Global benchmark transaction in 2016 and is also its first 2-year US dollar benchmark transaction this year.

BNP Paribas, Goldman Sachs International, Nomura and TD Securities were mandated as joint-lead managers on the transaction.

The African Development Bank decided to take advantage of the supportive market conditions for issuance and a clear execution window this week, following the heavy primary supply in Supranational, Sovereigns and Agencies (SSA) in the 3-year segment witnessed in the previous two weeks.

The mandate for a new 2-year USD Global benchmark was announced on Tuesday, October 18, 2016, shortly after 2:30 p.m. London time and Initial Price Thoughts (IPTs) of Mid-swaps (MS) +4 basis points (bps) area were released simultaneously for gathering Indications of Interest overnight.

The deal met with immediate investor interest and with Indications of Interest in excess of US $600 million, the books were officially opened in the European morning on Wednesday at 8:05 a.m. London time with a price guidance of MS +4bps area, in line with the IPTs.

On the back of extremely high quality orders and with final demand in excess of US $1.3 billion, the issuer decided to set the deal size at US $1 billion.

The deal was priced at 5 p.m. London time with a re-offer yield of 1.073%, equivalent to a spread of 27.4 bps against the 2-year US Treasury bond CT2 0.750% of September 2018.

Distribution Statistics

Final distribution figures highlight AfDB’s strong penetration across key regions. The high quality order book saw 36 accounts participating, dominated by demand from Central Banks and Official Institutions, who took up the lion’s share of allocation of 73%.


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