AfDB Executes US$1 Billion Bond Issue

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On 13 January 2009, as part of its USD 3.7 billion 2009 borrowing program, the African Development Bank successfully executed a US$ 1 billion benchmark global bond issue in the international market. The 3-year bond, lead managed by BNP Paribas, Citi and Goldman Sachs, was priced at mid-swap + 40 bp and carries a coupon of 1.875%. 

“The transaction marks AfDB’s strong return to the US Dollar global benchmark market as it had not made any issue of such a magnitude since 2003, and follows from a successful 3-year USD 500 million bond in 2008”, indicated Pierre Van Peteghem the treasurer of AfDB. 

“The Bank’s issue was made on the back of successful roadshows in Europe, the Middle East and Asia and followed from careful monitoring of the market and positive feedback from investors. The book was of the highest quality with central banks being strongly represented (88%) which would ensure stability and a good performance in the secondary market”, declared Hassatou N’Sele the head of funding of the AfDB.

The successful outcome of this transaction is credit to the standing AfDB holds in the capital markets as one of the few institutions still having easy access to funding in spite of the challenging and difficult conditions faced by issuers worldwide. Investor participation was well distributed geographically with Americas leading with 40% followed by Asia and the Middle-East/Africa region that accounted for a quarter each and Europe for 8%. 

The transaction is the Bank’s seventh global bond since 2002 continuing the strategy of maintaining presence in that market as a rare but consistent issuer.

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