African Development Bank launches inaugural GBP 300 million 5.5% Social Global Benchmark due August 2025

The African Development Bank (AfDB), rated Aaa/AAA/AAA/AAA (Moody’s/S&P/Fitch/Japan Credit Rating, all stable), has successfully priced an inaugural GBP 300 million (no-grow) 2-year Global Benchmark transaction, in a Social Bond format, due August 2025 at UKT 0.625% Jun-25 + 65bps.

The Bank took advantage of a clear issuance window ahead of the quieter summer period, despite the heightened volatility, to announce its inaugural Social Bond in GBP and first GBP benchmark issued since January 2022. The orderbook opened on the new GBP 300 million (no-grow) 2-year Social Bond just after 9.35am UKT on Thursday 20 July 2023 morning, with a spread guidance of UKT + 65bps area.

Given the relatively late announcement caused by increased swap market volatility and in order to provide clarity to investors, the final re-offer spread was set at UKT + 65bps at 11.10am UKT. It was also communicated that the orderbook would close at 12.00pm UKT.

The final orderbook ultimately closed in excess of GBP 315 million (including GBP 40 million of Joint-Lead Managers interest), with the Sterling market representing an important source of investor diversification for the Bank. 

In terms of distribution by investor type, Central Banks and Official Institutions were the largest investor component, taking 50% of final allocations, supported by participation from Banks & Bank Treasuries (30%) and Fund Manager/Insurance/Pension Fund accounts (20%). In terms of geography, the transaction was well-placed amongst Asia (47%), the UK (45%) and EMEA ex. UK accounts (8%).

The funds raised through this transaction will be used to finance eligible social projects in accordance with the African Development Bank’s Social Bond Program, with the goal to promote sustainable economic development and social progress in Africa. Eligible projects financed with proceeds of this new GBP-denominated Social Bond are expected to lead to poverty reduction and job creation. The projects are also expected to boost inclusive growth across age, gender, and geography, thus improving the quality of life for the people of Africa.

GBP is the sixth currency issued under the Bank’s Social Bond program, following previous issuances in Euro (EUR), Norwegian Kroner (NOK), US dollars (USD), Swedish krona (SEK) and Australian dollars (AUD).

 Bond terms and conditions: