The 2-year benchmark transaction was announced on Monday, October 26th at 1:30 p.m. London time with initial pricing thoughts in the area of mid-swaps +12 basis points area.
The order book was extremely robust with indications of interest from investors in excess of US$ 1.9 billion before the transaction officially opened. This represented a very positive sign given the recent volatility and uncertainty affecting global capital markets. As a result of the high quality of the order book and the fact this transaction was limited in size to US$1 billion, a rare 2 basis point tightening from initial pricing thoughts was called for and order books opened at mid-swaps plus 10 area on Tuesday, October 27th, 2015 at 8:15 a.m. London time.
With positive feedback from investors, the size of the order book continued to grow after the official open. The order book was closed at 9:45 a.m. London time after only 90 minutes of book-building, capturing orders in excess of US$ 2.1 billion. The transaction was priced at 4:45 p.m. London time on Tuesday October 27th at a spread of mid-swaps plus 9 basis points. This was equivalent to 20.95 basis points over the 0.625% UST due September 2017.
Demand was driven by high quality accounts as the 64% participation from central banks and official institutions demonstrates. The remainder was split between fund managers (20%), pension funds (10%) and banks and corporates (6%).
Geographically, demand was well diversified across the globe with the Americas taking 41%, Europe 32%, Asia 19% and Africa 8%.
The joint lead managers on the transaction were Bank of America Merrill Lynch, Goldman Sachs, J.P. Morgan and Societe Generale.
The AfDB is rated triple-A by all major credit rating agencies including Fitch, Japan Credit Rating Agency, Moody’s, and Standard & Poor’s. The new 2-year US$ 1 billion global benchmark transaction demonstrates the loyal following the Bank benefits from in the international capital markets.
