1.125% US$ 1.0 Billion Benchmark due 4 March 2019

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Issuer:                 African Development Bank (AfDB)
Rating:                 Aaa (Moody’s) / AAA (S&P) / AAA (Fitch)
Issue amount:    USD 1.0 billion
Pricing Date: 4 February 2016
Settlement Date: 4 March 2016 (T+7)
Coupon:               1.125% (semi-annual)
Maturity:              4 March 2019
Benchmark:         UST 0.750% due 15 February 2019
Reoffer Price:      99.906%
Reoffer Yield:        1.157% (semi-annual)
Re-offer vs. Mid-Swaps: + 29 bps
Re-offer vs Benchmark: 0.750% February 2019 +29.5 bps
Lead Managers:   BNP Paribas, HSBC, J.P. Morgan, Nomura
Co-Lead Managers: Société Générale

Transaction Highlights

  • African Development Bank (AfDB), rated Aaa (Stable) / AAA (Stable) / AAA (Stable (Moody’s / Fitch / S&P), has successfully priced a USD 1 billion 1.125% 3-year USD Global benchmark due on 4th March 2019 through BNP Paribas, HSBC, J.P. Morgan, Nomura (Leads) and Société Générale (Co-Lead). This transaction is AfDB's first USD Global benchmark outing of 2016, following a successful inaugural US$ 650 million FRN issued at the end of January.
  • Taking advantage of a clear issuance window after a period of relative market stability, the mandate for a Global USD 1 billion (“no grow”) benchmark transaction was announced on Tuesday 23rd February at 2 pm London time, with initial price thoughts in the mid-swaps +‘high twenties’ region.
  • A significant number of high quality accounts reacted to the announcement, submitting their indications of interest throughout the London afternoon, US session and in the Asian morning. As a result, books were opened promptly at 8 am, London, with official price guidance remaining in the MS+29 bps area.
  • Given AfDB's strong liquidity position, the deal size was capped at a maximum of USD 1 billion from the outset. After an hour, books exceeded USD 850 million for the “no grow” transaction.
  • Interest in the transaction from extremely high quality buy-and-hold accounts continued to develop strongly, and at the US open the spread was set at MS+29 bps, with books in excess of USD 1.2 billion, before closing at 2:30 pm London over USD 1.3 billion.
  • Pricing took place in the London afternoon from a reference of MS+29 bps, equivalent to UST 0.750% due 15 February 2019 + 29.5 bps.

Distribution Statistics

Almost 40 investors were involved and the orderbook was of extremely high quality, with Central Banks and Official Institutions (81%) taking the bulk of the transaction, the highest seen on a USD SA deal this year. Final distribution figures highlight AfDB's strong penetration across different regions and Americas (37%) and EMEA (51%) were particularly well represented. 

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