AfDB introduces its inaugural sustainable bond

Date:

The African Development Bank has unveiled a $2 billion global social bond set to mature on February 25, 2027.

This marks the institution’s inaugural social bond issuance under the newly established Sustainable Bond Framework introduced in September 2023. The three-year tenor bond carries a 4.125% interest rate.

The AfDB, maintaining a stable Aaa/AAA/AAA/AAA rating from Moody’s, S&P, Fitch, and Japan Credit Rating, positioned the sustainable bond program to consolidate and strengthen its existing Green and Social Bond initiatives.

Notably, this 3-year Social Benchmark stands as the bank’s first global benchmark for the year, strategically aligning with the robust reopening of primary markets in January 2024.

The issuance, amidst a dynamic week in the USD SSA markets, saw the launch of 8 benchmarks totaling $17.25 billion within two days.

With a compelling order book exceeding $3.5 billion, the bond garnered significant support from diverse global investors, including central banks, official institutions, and bank treasuries, constituting 78% of the book.

Geographically and in terms of investor profiles, the distribution was well diversified, with 76 orders in the book.

Notably, the social label attracted considerable interest from ESG investors, comprising 38% of participants in the book.

The mandate for the bond was disclosed on January 17 at 15:00 GMT, and the initial pricing thoughts indicated strong investor demand, reaching $2.1 billion by the time the books officially opened on Thursday, supported by Indications of Interest during the overnight session.

 

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