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African Development Bank - EUR 1 billion 0.250% 7-year Benchmark Transaction due January 2024

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Final terms of the transaction


African Development Bank, rated Aaa / AAA/ AAA (Moody’s / S&P / Fitch)

Principal Amount

EUR 1,000,000,000

Pricing Date

January 17, 2017

Settlement Date

January 24, 2017

Maturity Date

January 24, 2024

Re-Offer Price/Yield

99.709% / 0.292%



Spread vs. MS


Spread vs. DBR 1.750% February 2024



EUR 1,000


Issuer’s Global Debt Issuance Facility


Luxembourg Stock Exchange (Regulated Market)



Joint Bookrunners

Barclays, Crédit Agricole CIB, Natixis, NatWest

Context of the transaction

On Tuesday, January 17, 2017, the African Development Bank (AfDB), rated Aaa / AAA/ AAA by Moody’s / S&P / Fitch (all stable), successfully launched a EUR 1 billion 7-year Benchmark transaction due January 24, 2024. The issue priced at 3 bps through Mid-Swaps, equivalent to a spread of 45.5 bps over the DBR 1.750% February 2024. This represents AfDB’s first ever 1 billion EUR benchmark transaction following from its debut EUR 10-year issue in October last year. Despite a heavy week of supply in the Supra, Sovereign and Agency space, AfDB took advantage of a short window of execution ahead of the ECB meeting on Thursday to bring this successful transaction to market.

Launch and execution process

·  The issue was announced on Monday, January 16 at 3:45 p.m. London time on the back of supportive market conditions and despite uncertainty surrounding Theresa May’s press conference on Tuesday on Brexit details.

·  Initial Pricing Thoughts for a EUR 7-year Benchmark were released at Mid-Swaps minus 3 bps area on Tuesday, January 17 at 8:00 a.m.

·  Books opened at 9:30 a.m. London time at a spread of Mid-Swaps minus 3 bps, with indications of interest already in excess of EUR 550 million from high quality investors. Momentum continued into the morning with the book growing above EUR 700 million by 11 a.m. at which time spread was set at Mid-Swaps minus 3 bps.

·  Books closed at 12:00 p.m. London time, in excess of EUR 1.1 billion with very strong support from real money accounts across regions and soon after the transaction was launched with a EUR 1 billion size at Mid-Swaps minus 3 bps.

·  The second EUR benchmark transaction issue from the African Development Bank was priced at 4:00 p.m. London time with a spread of Mid-Swaps minus 3 bps in line with guidance, equivalent to a spread over the DBR 1.750% February 2024 of 45.5 bps.

·  With respect to investor type breakdown, Central Banks and Official Institutions took the largest share (52%), followed by Asset Managers (25%), Banks (13%), Insurance (9%) and Others (1%). By geography, Asian accounts led with 21%, followed by Germany/Austria (20%), Benelux (17%), France (17%), America (10%), Switzerland (8%), Others (4%) and Nordics (3%).

“This is the first step for establishing the AfDB as a regular issuer in the Euro capital markets. We have been very active in the US dollar space, but given the growth of our funding program in recent years (USD 9 billion dollars for 2017) we are actively diversifying our sources of funds,” said AfDB Treasurer, Hassatou N’Sele.

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About AfDB

The African Development Bank (AfDB) Group is the premier development finance institution in Africa with a mandate to spur sustainable economic development and social progress in the continent, thereby contributing to poverty reduction. The Bank Group achieves this objective by mobilizing and allocating resources for investment in the continent; and providing policy advice and technical assistance to support development efforts. The African Development Bank’s authorized capital of around USD 100 billion is subscribed to by 80 member countries made up of 54 African countries and 26 non-African countries.

The African Development Bank’s Strategy for 2013–2022 (Ten-Year Strategy) reflects the aspirations of the entire African continent and is firmly rooted in a deep understanding and experience of how far Africa has come in the last decade, and where it wishes to go to in the next. In 2015 a new strategic operational agenda was laid out for the Bank, outlined in the “High 5s”, aimed at providing a sharp focus on the Bank Group’s work as it implements the Ten-Year Strategy. The High 5s are to: Light up and Power Africa; Feed Africa; Industrialize Africa; Integrate Africa; and Improve the Quality of Life for the People of Africa. These operational priorities are consistent with the Sustainable Development Goals and therefore essential in transforming the lives of the people of Africa through rapid, sustained, and inclusive growth.

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