The African Development Bank (AfDB) has launched and priced a $2 billion five-year Global Benchmark bond due March 14, 2028, its first of the year.
The bond was issued on 7 March.
With this issue, the African Development Bank continues to carry out its funding strategy of issuing large liquid benchmark transactions and adds another on-the-run reference in the five-year maturity while extending its outstanding USD curve.
With the final orderbook closing in excess of $3.5 billion and 95 investors participating, the African Development Bank set the size of the transaction at $2 billion.
The issue garnered interest from top-quality investors with particularly good demand from Central Banks/Official Institutions.
The Bank’s mandate for a 5-year USD Global Benchmark was announced on Monday 6, March at 09:07 am with Initial Pricing Thoughts (IPTs) released at mid-swaps plus 35bp (basis points) area at 12.34 pm London time.
The deal enjoyed good investor demand during the first afternoon and overnight with Indications of Interest (IoI) reaching $2.1 billion by the time books officially opened on Tuesday 7, March 2023 at 07:57 London time.
The orderbook continued to grow throughout the European morning, with investor demand equaling $3.5 billion by 10:28 London time, which allowed the spread to be tightened by 2bps and set at SOFR mid-swaps + 33bps.
Shortly thereafter, at 12:54 London time, the high-quality orderbook allowed the transaction to be launched with a size of USD 2 billion, with America’s books set to go subject at 13:30 pm.
The trade officially priced at 5.58 pm London time at SOFR mid-swaps plus 33bps, equivalent to a reoffer yield of 4.435% and a spread of 14.3bp vs the on-the-run five-year US Treasury.
With the final orderbook closing in excess of USD 3.5 billion with more than 90 orders, the success of this 5-year transaction is a clear vote of confidence from investors in the Bank’s AAA credit.
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