AfDB to raise $463.9m from Australian bond market
The African Development Bank launched a A$600m ($463.9m) 5.5-year Kangaroo bond, marking its return to the Australian dollar bond market.
A Kangaroo bond is a foreign bond issued in the Australian market by non-Australian firms and is denominated in Australian currency.
The bank, in a statement on Monday, described the bond as its first benchmark Kangaroo since early 2018, its first in the mid-curve since 2015, and the largest AUD trade ever issued by the bank
It said the transaction was led by Nomura and RBC Capital Markets, adding that more than 30 investors participated in the deal, with a total order book of more than A$775m, leading to an upsize of the trade from the announced size of A$250-300m to the final size of A$600m.
The statement said the investors included a strong cohort of Australian investors, while fund managers were the major investor type.
AfDB’s Treasurer, Hassatou N’sele, said the COVID-19 pandemic had led to a rise in global issuances of social bonds.
N’sele said, “Following on from the ground breaking USD$3.1bn three-year ‘Fight Covid-19’ Social Bond we issued in 2020, we’re glad to see that public domestic markets, like the Kangaroo bond market, are now seeing similar development in terms of interest from dedicated ESG investors, which provided additional momentum enabling us to print the largest trade we’ve ever done in AUD.
“The African Development Bank’s social bonds have use of proceeds allocated to projects that alleviate or mitigate social issues such as improving access to electricity, water and sanitation, and improving livelihoods through flood-risk reduction and access to clean transportation and employment generation.”
The Manager of Capital Markets and Financial Operations, Keith Werner, said 38 per cent of investors in the deal had a socially responsible investment approach, adding that the AfDB intended to issue more social bonds in Australian dollars.
“In addition to the important contribution that socially responsible investors had to the success of this trade, it’s also gratifying to see such a large portion of the investors (41 per cent) were domestic, which is an area where we haven’t seen strong support historically.
“We look forward to leveraging this momentum and continue evaluating opportunities in the future in this market,” Werner said.