AfDB launches $2b fixed rate global benchmark bond

The African Development Bank (AfDB) has launched a $2 billion 2.625 per cent Global Benchmark bond. The bond is due March 22, 2021, the Bank said in a press release copied to ghanabusinessnews.com.

 The transaction was priced at 4:50pm London with a re-offer yield of 2.661 per cent, equivalent to a spread of 26.35bps over the 3-year US Treasury benchmark 2.375 per cent March 2021, it noted.

According to the release, the bond issue represents the Bank’s first public market deal of 2018.

“It follows the $2.0-billion 5-year Global Benchmark priced in November 2017, and is in line with its strategy of issuing larger size, more liquid benchmark transactions. The Global Benchmark was very well oversubscribed, with an order book in excess of $4.25 billion. More than 80 investors participated in the transaction, including six that were new to the Bank, demonstrating that the deal was well placed across diversified geographies and investor type. The high quality of the order book is illustrated by the strong participation of Central Banks and Official Institutions,” the release said.

The Bank says it decided to take advantage of the positive market backdrop and of the widening in US dollar swap spreads to issue its first Benchmark of the year.

“The issuer announced the mandate on Tuesday, March 13, at 2:50pm London time with Initial Pricing Thoughts (IPTs) in the context of mid-swaps plus 1 basis point (bp) area,” the release added.

By Emmanuel K. Dogbevi