AfDB USD 1bn 2.5% Global due 15 March 2016

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Transaction Highlights

  • Tightest priced 5-year US Dollar benchmark by the AfDB since 2003
  • Strong demand from central banks/official institutions
  • No price sensitivity from any investors in the orderbook

African Development Bank (“AfDB”) priced its first public USD benchmark of 2011 on Thursday, February 17th. The issue has a final maturity of 15th March 2016, pays a semi-annual coupon of 2.5% and has an issue price of 99.843% to give a spread of + 26.6 basis points over the UST 2% due Jan 2016, equivalent to 4 basis points over mid-swaps.

Following the mandate announcement late (London time) on Wednesday evening, indications of interest poured in rapidly. The books were opened at 8.00am London time on Thursday with an initial guidance of mid-swaps plus 4 basis points “area”. Driven by large demand from Asia and Europe, books were already approaching USD 1 billion when US markets opened.

The final book closed at 4.00pm London time, comprising over 35 orders. The transaction size was capped from the outset at USD 1 billion and was priced in line with an initial guidance of midswaps plus 4 basis points. The orderbook was dominated by high quality accounts, with around 35 investors participating in the transaction, demonstrating the breadth of AfDB’s investor reach. Central Banks and Official Institutions demand was strong and accounted for the largest share (50%). All major regions were well represented in the book with Americas accounting for 37%, Middle-East and Africa 28%, Europe 24% and Asia 11%.

Transaction Details:

  • Rating: Aaa / AAA / AAA
  • Issue Amount: USD 1 bn
  • Issue Date: 17-Feb-11
  • Settlement Date: 25-Feb-11
  • Coupon: 2.5 % payable semi-annually
  • Maturity Date: 15-Mar-16
  • Reoffer Spread: Mid swaps + 4 bps , UST 2% 01/16 + 26.6 bps
  • Reoffer Price: 99.843%
  • Reoffer Yield: 2.533% s.a.
  • Format: Global
  • Joint Lead Managers: Daiwa, Deutsche Bank, HSBC, JPM

Distribution Stats:

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The securities mentioned herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States (as such term is defined in Regulation S under the Securities Act)unless they are registered under the Securities Act or pursuant to an exemption from registration. No public offer of the securities mentioned herein is being made in the United States.

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