AFD Issues EUR 1.5 Billion 7-Year Sustainable Bond Maturing in January 2030

On Thursday 12th January, Agence Française de Développement (AFD), rated AA (S&P)/AA (Fitch) – successfully launched a new EUR 1.5 billion 7-year Sustainable Benchmark transaction due on 21st January 2030. This represents AFD’s second benchmark transaction this year, following the GBP 500 million executed on Monday.

The bond carries an annual coupon of 2.875% and was priced at a final re-offer yield of 2.967%, offering a final spread of 51 basis point over the OAT curve. The joint lead managers for this transaction were Barclays, BNP Paribas, BofA Securities, Citi and Société Générale.

"We are very pleased with the launch of our 2023 financing programme with two transactions this week, a first one of GBP 500 million and this transaction of EUR 1.5 billion for a total of more than EUR 2 billion raised. We thank investors for their trust and will communicate within two weeks on our 2023 financing needs", Thibaut Makarovsky, Head of Funding and Market Operations

Highlights:

This is AFD’s second benchmark this year after their GBP 500 million transaction.
The orderbook reached EUR 2.4 billion at the peak, allowing AFD to price a EUR 1.5 billion size.
The final pricing was 2 basis points inside the Guidance level, landing at OAT+51bp.
The book was diversified across a range of geographies with more than 65 investors participating.

Transaction Details:

The mandate was announced to the market early in the afternoon on Wednesday 11th January 2023.
Books were officially opened slightly after 9am CET the next day with a price guidance of OAT+53bp area.
Despite a busy week in terms of primary supply, investors responded rapidly over the morning and the orderbook reached EUR 1.9 billion at 10:45am CET. Orders continued to come in to reach EUR 2.4 billion, allowing the issuer to set the spread at OAT+51bp around 11:40am CET.
The books finally closed around 12:15pm CET with a final demand of EUR 2.1 billion. This allowed AFD to set the size at EUR 1.5 billion and to price just before the US CPI number, closely looked at by market participants.
The transaction was characterized by strong demand from a broad range of top quality accounts, with Asset Managers taking 38% of the allocations, Banks 37% and Central Banks & Official Institutions 14%. In terms of geographical distribution, French investors accounted for 26% of the final size, shortly followed by UK & Ireland accounts at 23%, and Germany, Austria & Switzerland accounts at 18%.