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The largest share of the allocation was taken up by hedge/specialized funds (54.8%), followed by asset managers (27.8%). Central banks and official institutions took 6.7% while pension funds/insurance had 6.6%. Demand came mainly from the United Kingdom (51.1%) followed by Europe, the Middle East, and Africa at 26.5%, Asia (14%), and America (8.4%).
The African Development Bank (AfDB) has successfully launched and priced its first sustainable dollar-denominated 750 million perpetual subordinated hybrid capital notes. The transaction, made on 30 January, was launched with a coupon of 5.75% until August 2034, with a 10.5-year first-call date, at AfDB’s discretion. The bank achieved a top quality and granular order book with over 275 investors while over 190 were allocated. Investor demand remained upbeat with a peak order book of over US$6 billion.
The largest share of the allocation was taken up by hedge/specialized funds (54.8%), followed by asset managers (27.8%). Central banks and official institutions took 6.7% while pension funds/insurance had 6.6%. Demand came mainly from the United Kingdom (51.1%) followed by Europe, the Middle East, and Africa at 26.5%, Asia (14%), and America (8.4%).
It was the first such bond issuance by a multilateral development bank, giving AfDB a pioneering role in optimizing its balance sheet in line with the G20 Capital Adequacy Framework (CAF) recommendations to boost lending capacity. Hybrid capital is an innovative form of capital, which increases sustainable lending capacity.
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The bank mandated BNP Paribas and Goldman Sachs International as joint structuring agents and Barclays, BNP Paris, BofA Securities, and Goldman Sachs International as joint book runners to lead and manage its new perpetual non-call (PerpNC) 10.5-year inaugural USD Global SEC-exempt sustainable hybrid transaction. As a new component of the AfDB’s capital base, the sustainable hybrid capital will allow additional lending capacity to fund environmental and/or social projects.
