FRI, JANUARY 20 2017-Central Banks, Asset Managers and Insurance quickly gobbled the African Development Bank (AfDB) EUR 1 billion 7-year Benchmark transaction due January 24, 2024, shortly after it was successfully launched Tuesday, January 17, 2017.
The triple AAA rated premier development finance institution in Africa announced the issue was priced at 3 bps through Mid-Swaps, equivalent to a spread of 45.5 bps over the DBR 1.750% February 2024.
“The issue represents AfDB’s first ever 1 billion EUR benchmark transaction following from its debut EUR 10-year issue in October last year,” according to the Bank in a release Thursday January 19 2017.
The AfDB in the release said that despite a heavy week of supply in the Supra, Sovereign and Agency space, the Bank took advantage of a short window of execution ahead of the ECB meeting on Thursday to bring the transaction successfully to market.
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, according to the Bank.
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%),” the Bank said.
“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.
