OREANDA-NEWS. The African Development Bank (“AfDB”),  launched and priced a new USD 1 billion 5-year Global benchmark transaction due 26 July 2021.

The new 5-year issue is AfDB’s third USD Global benchmark this year, and follows on from two successful USD 1 billion 3-year Global benchmark transactions priced in February and April respectively, which had both tightened significantly on the secondary market. This new benchmark transaction brings a new liquid and on-the-run reference on the 5-year point of the AfDB curve which had not been refreshed since February 2015.

Given the constructive market backdrop, in spite of the events in Turkey over the weekend, the AfDB decided to seize a clear execution window and announced a new 5-year Global USD transaction on Monday, July 18, 2016 at 10:00 am London time. Initial price thoughts of midswaps +25 basis points area were subsequently released to the market at 12:45 pm London time for this USD 1bn “no grow” transaction.

Initial investors’ reaction was good with interest exceeding the USD 1bn mark before the books were officially opened the following morning at 8:20 am London time with a price guidance of midswaps +25 basis points area, in line with initial pricing thoughts.

The order book grew steadily during the morning session with demand exceeding USD 1.3 billion by 11 am London time. Books for European and Asian accounts closed at 11.30am London time. By 1pm London time, books had continued to grow in excess of USD 1.4bn and the spread was set at m/s+24bps. Books for US accounts eventually closed at 1.30pm London time. The new 5-year benchmark priced at 6.30pm London time at m/s+24bps implying a 23.2bps spread over Treasury and a re-offer yield of 1.336%.