Source: African Development Bank
On Wednesday 7th January, the African Development Bank (‘AfDB’) successfully priced a new £1 billion three-year global benchmark rated Aaa/AAA/AAA (Moody’s/S&P/Fitch). Capitalizing on a very strong market with great momentum, this transaction marked the Bank’s successful return to the pound market.
The new January 2029 GBP benchmark strategically extends the AfDB GBP curve and has attracted significant interest from a wide range of domestic and international investors. The high-quality, detailed order book closed more than £2.3 billion of trades (including £70 million in joint lead manager (JLM) interest) from more than 50 accounts, and enabled the AfDB to print a £1 billion transaction, the Bank’s largest ever trade in the pound market.
Against the backdrop of a very supportive market, we have announced the new Pound Global Benchmark, scheduled for January 2029 at 8:50am UK time. At the moment, the book opened with initial price guidance in the SONIA MidSwap (MS) +35 basis points (bps) area.
Investor demand has been strong from the start, with high quality orders exceeding the £1.5bn mark (including JLM rates) by 10:30am UK time. Reflecting the strong shape of the order book, the spread was set at SONIA MS +34bps, but we kept the trade size open to allow flexibility regarding the final issue size. The order book continued to grow and closed at over £2.3bn (including £70m in JLM interest) as of 11:15am UK time. The excellent quality order book and 2.3x oversubscription enabled the AfDB to set an issue size of £1 billion.
By type of investor, bank government bonds accounted for the largest allocation at 66%, highlighting the strong support of banks. Central banks and public institutions accounted for 26% of the order book, highlighting its appeal to sovereign and policy-driven investors. The remaining 8% was accounted for by fund managers and other participants, further diversifying the investor profile.
The official price for this deal is 2pm UK time, with an annual coupon of 3.750%, an annual yield of 3.835%, and a spread of +15.2bps on 01/01/29 UK time. This highly successful transaction demonstrates the AfDB’s ability to quickly capture the significant amount of liquidity available in the pound market so far this year, while expanding its investor base.
Rating Aaa/AAA/AAA (all stable) Release date January 7, 2026 Settlement date January 14, 2026 Maturity date January 14, 2029 Size GBP 1,000,000,000 Coupon 3.750%, Fixed, Annual, ACT/365 Re-Offer Spread vs SONIA MS +34bpsUKT Benchmark UKT 0.5% 31/01/29 Re-offer spread vs UKT +15.2bps Re-offer price / Yield 99.763% / Annual yield 3.835% / Semi-annual yield 3.799% Format Global (SEC exempt) ISIN XS3272090195 Joint lead managers Bank of Montreal, HSBC, Banco Santander
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