AfDB launches first sustainable bond

The African Development Bank has launched a $2bn social global bond due 25 February 2027.

In a statement, the Continental Development Bank said that the transaction was its first social bond issued under its new Sustainable Bond Framework, established in September 2023.

The bond comes with a 4.125 per cent three-year tenor.

AfDB is rated Aaa/AAA/AAA/AAA by Moody’s, S&P, Fitch and Japan Credit Rating, as stable.

The bank said, “Sustainable bond programme seamlessly consolidates and enhances the African Development Bank’s existing Green and Social Bond programmes, facilitating the issuance of green bonds, social bonds, and sustainability bonds.

“This new 3-year Social Benchmark is the bank’s first global benchmark of the year, strategically aligned with the robust reopening of primary markets in January 2024. This issuance is a significant highlight amid a dynamic week in the USD SSA markets, witnessing the launch of 8 benchmarks totalling $17.25bn within two days.”

AfDB noted that the issuance received strong support from the global investor community, with an order book in excess of $3.5bn and attracted high-quality investors, including central banks, official institutions, and bank treasuries, constituting 78 per cent of the book.

It stated that the distribution was well diversified across geographies and investor profiles, with 76 orders in the book.

“The social label garnered interest from ESG investors, representing 38 per cent of participants in the book,” it added.

The AfDB’s mandate for the bond was announced on January 17 at 15:00 GMT.

“Initial Pricing Thoughts were released at SOFR mid-swaps plus 33bp (basis points) area. The deal enjoyed good investor demand during the overnight session with Indications of Interest reaching $2.1bn by the time books officially opened on Thursday,” it further stated.

Provided by SyndiGate Media Inc. (Syndigate.info).