In an effort to reach the French government’s target of dedicating 0.70% of France’s GNP to Overseas Aid by 2025, AFD will continue to finance its lending activity, which will also facilitate bond repayments over the year.
AFD will execute these transactions under its €60bn EMTN (Euro Medium Term Note) program.
In 2022, AFD issued a total of €9.52 billion through twenty-seven issues. These trades were carried out over eight public transactions (including one tap):
- Three bonds and one tap in euros: a fifteen-year bond of €750mn, a ten-year bond of €1.5bn and a long ten-year bond of €1.2bn. A long fourteen-year bond tap of 400mn.
- Three bonds in US dollars: a three-year bond of $1.5bn, a two-year bond of $1bn and a 5-year bond of $1.25bn.
- One bond in British pound: a long three-year bond of £500mn which marked a successful return to the sterling market for AFD, whose last issue in this market was priced in 2015.
Among those eight public transactions, almost a half was funded through SDG bonds : the two ten-year euros bonds described above and for the first time for a French Agency a US dollars bond (five-year maturity). Thematic bonds accounted for 48% of the total €9.52 billion issued last year.
With these transactions, AFD demonstrated its ability to provide liquidity to its investors and to become a frequent actor on the SDG bond market.
What to expect for 2023 ?
In line with its commitments to the market, and pending conditions and investors’ requirements, Agence Française de Développement will issue in the medium and long term, at least two euro benchmarks and one or two usd benchmarks.
AFD has already issued the equivalent of €2.07Bn through a €1.5bn benchmark with a seven-year maturity and a £500mn benchmark with a long three-year maturity.
AFD’s commitment is to issue between 40% and 50% of its 2023 funding program through SDG bonds.
As in previous years, Agence Française de Développement will adapt to investor demand. Issuance of taps and Floating Rate Notes either under public or private formats will be subject to demand. AFD will also endeavor to meet the liquidity needs of investors, within the limit of a maximum of 2 billion per issue.
AFD will maintain the development of its private investment franchise in 2023, and will continue to send a pricing grid to its dealers on a weekly basis. Prices issued are in euros but AFD is willing to print in any currency (including exotic currencies).
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