The African Export-Import Bank (Afreximbank) announced that it has successfully acted as Joint Global Coordinator for the first €500m RegS-only senior unsecured social bond issued by the Arab Bank for Economic Development in Africa (BADEA). The bond is under BADEA’s new Euro Medium Term Note (EMTN) programme listed on the London Stock Exchange.
BADEA is a development finance institution established in 1974 by 18 members of the League of Arab States (LAS) to provide targeted financing to 44 non-Arab Sub-Saharan African countries. It has total assets of $5.7bn as of June 2023. BADEA, rated Aa2/AA/AAA (positive/positive/stable) by Moody’s/S&P/JCR, issued its first €500mn 3-year social bond to fund eligible projects under its new Sustainable Finance Framework. The framework focuses on essential services (healthcare/education/MSME financing), food security, employment generation, and affordable housing sectors. The framework was independently verified by ISS.
The bond was 3.0x oversubscribed with a peak orderbook of €1.5bn and supported by over 50 high-quality institutional investors from Africa, the Middle East, Europe, the UK, and US offshore accounts. The 3-year bond was priced at 100bps over EUR mid-swap rate to yield 3.806% (annual fixed coupon 3.750%), well inside the initial price thoughts of 120-125bp.
Benedict Oramah, the President and Chairman of the Board of Directors of Afreximbank, commented on the transaction: “We are delighted to support BADEA’s market entry as the first thematic bond and the first Investment Grade-rated DFI bond led by Afreximbank. This reaffirms our drive to deepen capital market access for African issuers under all market conditions.”
Sidi Ould-Tah, the President of BADEA, also remarked on the transaction: “We are pleased with Afreximbank’s strategic contribution in placing our debut bond with high-quality anchor investors. This enables BADEA to channel more Arab African development funding to sectors with high social impact.”
Afreximbank, through its Advisory and Capital Markets (ACMA) department, acted as Joint Global Coordinator for BADEA’s bond issuance, along with other international banking partners.
