The African Development Bank has raised $3bn in a three-year bond to help alleviate the economic and social impact the COVID-19 pandemic will have on livelihoods and Africa’s economies.
It said in a statement last Friday that the Fight Covid-19 Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including socially responsible investors, with bids exceeding $4.6bn.
“This is the largest social bond ever launched in international capital markets to date, and the largest dollar benchmark ever issued by the bank. It will pay an interest rate of 0.75 per cent,” it stated.
The African Development Bank Group said it was moving to provide flexible responses aimed at lessening the severe economic and social impact of the pandemic on its regional member countries and Africa’s private sector.
President of the AfDB, Dr Akinwumi Adesina, said, “These are critical times for Africa as it addresses the challenges resulting from the coronavirus.
“The African Development Bank is taking bold measures to support African countries. This $3bn COVID-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries.”
The order book for this record-breaking bond highlights the scale of investor support, which the AfDB enjoyed, the arrangers stated.
Head of Sustainable Banking, Crédit Agricole CIB, Tanguy Claquin, said, “As the Covid-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure.”
Fight COVID-19 was allocated to central banks and official institutions (53 per cent), bank treasuries (27 per cent) and asset managers (20 per cent). Final bond distribution statistics were as follows: Europe (37 per cent), Americas (36 per cent), Asia (17 per cent) Africa (eight per cent) and Middle-East (one per cent).