On Wednesday 26 October 2022, the African Development Bank, rated Aaa/AAA/AAA/AAA (Moody’s / S&P / Fitch / Japan Credit Rating, all stable), launched and priced a new USD 2 billion 5-year Global Benchmark due 3 November 2027. This transaction marks the Bank’s second USD Global Benchmark in 2022 following the 3-year USD 1 billion benchmark issued in June, and its first 5-year benchmark issuance since July 2021. The bond pays a coupon of 4.375% with a re-offer yield of 4.458%.
A combination of high inflation and rising rates has changed the landscape for bond issuance over the past few weeks, causing considerable and persistent volatility. While Supranational Sovereign and Agency (SSA) transactions in weeks prior to this trade had shown investor support in the 3-year part of the curve, the 5-year part of the curve remained untested. As the lead arrangers were highlighting potential investor fatigue in the 3-year tenor, the decision was made to announce a 5-year USD benchmark before year-end, and before conditions potentially worsened.
The mandate for a new 5-year USD Global Benchmark was announced on Tuesday 25 October at 12.21pm London time, with Initial Pricing Thoughts released simultaneously at SOFR Mid-swaps plus 51 basis points (bps) area. The deal enjoyed robust investor demand from the outset as Indication of Interest from AfDB’s high quality investor base accumulated at a rapid pace, exceeding USD 1.6 billion overnight (including USD 150 million of Joint Lead-Managers’ (JLM) interest).
The books officially opened the following morning, Wednesday 26 October at 8.26 am London time, with price guidance unchanged at Mid-swaps + 51bps area. The order book continued to grow through the European morning, with investor demand approaching USD 2.3 billion (including USD 225 million JLM interest) by 9.45am London time, which allowed the Bank to set the spread 1bp tighter at Mid-swaps + 50bps.
With stable market conditions and a robust appetite from high-quality investors for the Bank’s credit, the order book closed in excess of USD 3.3 billion (including USD 225 million JLM interest). The transaction was launched with a size of USD 2 billion and priced at 4.43pm London time priced at Mid-swaps + 50bps, equivalent to a reoffer yield of 4.458% and a spread of 27.31bps vs the on-the-run 5-year US Treasury.
The new issue brings an on-the-run reference point in the 5-year part of the Bank’s USD curve, extending its outstanding curve, and demonstrating its commitment to maintain liquid lines at key benchmark maturities. With the final order book closing in excess of USD 3.3 billion (including USD 225 million JLM interest), and with 83 investors participating, the success of this 5-year transaction is a clear vote of confidence from investors in the Bank’s credit, even amidst the more recent volatile market backdrop.
Investor distribution statistics:
Transaction details:
| Issuer: | African Development Bank (“AfDB”) |
| Issuer rating: | Aaa / AAA / AAA (Moody’s / S&P / Fitch, all stable) |
| Amount: | USD 2 billion |
| Pricing date: | 26 October 2022 |
| Settlement date: | 03 November 2022 (T+6) |
| Coupon: | 4.375 %, Fixed, semi-annual 30/360 |
| Maturity date: | 03 November 2027 |
| Re-offer price: | 99.632% |
| Re-offer yield: | 4.458% annual |
| Re-offer spread: | SOFR Mid-swaps + 50bps / UST 4.125% 09/27 + 27.31bps |
| Joint-Lead Managers: | BNP Paribas, BofA Securities, Goldman Sachs, HSBC, Nomura |
| Senior Co-Leads: | Standard Chartered and CastleOak Securities |
| ISIN: | US00828EEP07 |
Source: afdb.org
Share this news
This Year’s Most Read News Stories
European Union Bans Air Tanzania Over Safety Concerns
Kampala — The European Commission added Air Tanzania to the EU Air Safety List, banning the airline from operating within European Union airspace. This decision follows the denial of Air Tanzania’s Third Country Operator (TCO) authorization by the European Union Aviation Safety Agency (EASA), citing significant safety deficiencies.
The EU Air Safety List includes airlines that fail to meet international safety standards. Commissioner Tzitzikostas emphasized the importance of passenger safety, stating: “The decision to include Air Tanzania in the EU Air Safety List underscores our unwavering commitment to ensuring the highest safety standards. We strongly urge Air Tanzania to take swift action to address these safety issues. The Commission has offered its assistance to Tanzanian authorities to enhance safety performance and achieve compliance with international aviation standards.”
Air Tanzania joins several African airlines banned from EU airspace, including carriers from Angola, the Democratic Republic of Congo, Sudan, and Kenya. Notable names include Congo Airways, Sudan Airways, and Kenyan carriers Silverstone Air Services and Skyward Express. The ban reflects the EU’s strict approach to aviation safety worldwide.
Source: allafrica.com
Zanzibar land lease controversy with British Developer
Zanzibar investment lease controversy rumbles on after President Hussein Mwinyi claims the land lease was terminated following a court case which the developer lost Contradictory details come to light.Continue Reading
Tanzania Declares Marburg Outbreak – Africa CDC Mobilizes Immediate Response
Addis Ababa, January 20, 2025</Strong> — Tanzania has declared a Marburg virus disease (MVD) outbreak after confirming one case and identifying 25 suspected cases in the Kagera Region of Northwestern Tanzania. The Marburg virus, a highly infectious and often fatal disease, is similar to Ebola and is transmitted to humans from fruit bats and monkeys. This outbreak marks the nation’s second encounter with the deadly virus, following the outbreak in Bukoba District of Kagera Region in March 2023, which resulted in nine cases and six deaths.
In response to this urgent threat, the Africa CDC is mobilizing strong support to help Tanzania contain the outbreak. A team of twelve public health experts will be deployed as part of an advance mission in the next 24 hours. The multidisciplinary team includes epidemiologists, risk communication, infection prevention and control (IPC), and laboratory experts to provide on-ground support for surveillance, IPC, diagnostics, and community engagement.
The Director-General of Africa CDC, Dr. Jean Kaseya, has engaged with Tanzania’s President Samia Suluhu Hassan and the Minister of Health to ensure coordinated efforts and secure political commitment for the response.
“Africa CDC stands firmly with Tanzania in this critical moment. To support the government’s efforts, we are committing US$ 2 million to bolster immediate response measures, including deploying public health experts, strengthening diagnostics, and enhancing case management. Building on Tanzania’s commendable response during the 2023 outbreak, we are confident that swift and decisive action, combined with our support and those of other partners, will bring this outbreak under control,” Dr. Kaseya stated.
Africa CDC has recently supported efforts to enhance the diagnostic and sequencing capacity of public health laboratories in Tanzania. PCR Test kits and genomic sequencing reagents have been dispatched, with additional supplies in the pipeline. To ensure rapid identification and confirmation of cases, the institution will also provide technical assistance to strengthen detection and genome sequencing for better characterization of the pathogen. Additionally, support will be provided to improve case management protocols and enhance the capacity to deliver safe and effective treatment.
Africa CDC is committed to working closely with the Government of Tanzania, regional partners, international organizations, and global stakeholders, including the World Health Organization, to stop the spread of the Marburg virus.
Source: allafrica.com
