African Development Bank Raises €1bn Through Five-Year Social Bond

The African Development Bank (AfDB) has raised one billion euros through a five-year social benchmark bond, bringing its funding for 2026 to 11.5 billion US dollars as it advances towards completing its annual borrowing programme.

The bond, which matures in October 2031, attracted orders exceeding 1.75 billion euros, including 200 million euros in interest from the joint lead managers, according to the bank. The AfDB priced the issuance at a spread of 10 basis points above mid-swaps, with an annual yield of 3.562 percent.

The transaction represents the bank’s second global euro benchmark issuance this year, following a 1.25 billion euro seven-year social bond issued in June.

The latest issuance brings the AfDB’s funding to 96 percent of its 2026 borrowing programme, reflecting the volume raised against its annual target.

European investors accounted for the largest share of allocations, with investors from Europe excluding the United Kingdom receiving 44 percent and UK investors taking 31 percent. Asian investors accounted for 15 percent, while those from the Middle East and Africa received 10 percent.

Banks received 40 percent of the allocation, followed by central banks and official institutions with 38 percent. Asset managers accounted for the remaining 22 percent.

The bond was launched with initial price guidance of around 11 basis points above mid-swaps before the spread was tightened to 10 basis points as demand built during the book-building process. The bank ultimately set the issue size at one billion euros.

Proceeds will be used to finance eligible social projects under the AfDB’s Sustainable Bond Framework, which supports projects intended to promote economic development and social progress across Africa.

Source: FSX Business News