AfDB Announces Investor Calls For Inaugural Dollar Benchmark Hybrid Capital Transaction

The African Development Bank (AfDB) has announced upcoming investor calls and meetings in New York, London and Paris, ahead of an inaugural US dollar Global Benchmark Sustainable Hybrid Capital transaction.

In July, S&P Global Ratings assigned an AA- rating to the proposed instrument – the highest rating for hybrid capital.

A statement from the AfDB on Wednesday, explained that the transaction would be issued in a Sustainable Bond format, under the Bank’s newly established Sustainable Bond Framework and would finance a combined portfolio of eligible green and social projects.

BNP Paribas and Goldman Sachs International have been mandated as Joint Structuring Agents & Joint Global Coordinators, and Barclays, BNP Paribas, BofA Securities and Goldman Sachs International as Joint Bookrunners. The banking institutions would arrange a series of global fixed income investor calls and meetings, commencing on Friday.

“Hybrid capital will have a multiplier effect on the bank’s financing, and allow for the issuance of additional green, social and sustainability bonds to finance projects targeting some of the continent’s most critical development challenges, including food security, access to water and sanitation, health services, and climate change.

“This is a great new way to enhance a multilateral development bank’s capital base and optimise its balance sheet. The African Development Bank is starting a new asset class, hybrid capital, issued by AAA-rated multilateral development banks,” said the Bank’s Vice President for Finance and Chief Financial Officer, Hassatou N’Sele.

Also, Acting Treasurer, AfDB, Omar Sefiani noted: “This hybrid capital transaction will open new opportunities for the Bank and other AAA-rated multilateral development banks to boost lending by tapping private investors.

“While the bank has been very active in generating additional lending capacity through risk reduction transactions on its assets, this transaction boosts its capital base and thus generates additional lending through its liabilities.”

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