On 15 May 2024, the African Development Bank (AfDB), with a triple-A rating from Moody’s, S&P, and Fitch, successfully launched and priced an inaugural EUR 500 million short 4-year Green Benchmark. This is the second green bond issued under the Bank's new Sustainable Bond Framework, established in September 2023. The bond, due March 2028, pays a coupon of 2.875% with a re-offer yield of 2.947%. The net proceeds from the Notes will be used to finance and/or refinance eligible green projects as outlined in the Issuer’s Sustainable Bond Framework.
This new short 4-year green bond marks AfDB’s first EUR global benchmark since September 2022 and its inaugural green bond in the EUR market. The issuance occurred during a particularly active week in the EUR SSA markets, which saw the launch of six global benchmarks totaling EUR 18 billion within three days.
The success of this green bond transaction is attributed to investors' confidence in AfDB’s Sustainable Bond Framework. This builds on the Bank's strategic commitment to support African countries’ transition to green growth and promote low-carbon and climate-resilient development on the continent.
The transaction received strong support from the global investor community with a final order book exceeding EUR 3.2 billion (including EUR 200 million of Joint-Lead Manager (JLM)’s interest) and was oversubscribed by a factor of 6.4x. Distribution was globally diversified and by investor types, with participation from 46 investors. ESG investors showed significant interest in the green label, representing 63% of the final order book.
At 11:10 CET on Tuesday, May14th, AfDB announced a mandate for an inaugural EUR 500 million short four-year Green benchmark set for March 2028. This took advantage of favourable market conditions and a strong primary market backdrop to launch its inaugural Green Bond on the EUR market.
The transaction was priced at 13:34 CET with a re-offer yield of 2.947%, equivalent to a spread of 39.5bps vs DBR 0.5% 02/15/28 and a spread of 9.7bps vs OAT 0.75% 25/02/2028.
The geographical distribution highlights a diversified investor base, with the majority of the book from Europe (70%), followed by Africa (16%), Asia (10%) and the Middle East (3%). In terms of investor type, the high-quality order book was predominantly allocated to Central Banks & Official Institutions (60%), Bank Treasuries (28%) and Asset Managers / Insurance / Pension Funds (12%).
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