Key aspects of the transaction:
With this new transaction, AFD has now issued 4 benchmark bonds in 2023. It also marks its second EUR benchmark this year, following on from a €1.5bn 7-year Sustainable Bond issued in January. The transaction’s success confirms investor continuous support in the AFD signature, effectively marking its largest offering and orderbook since 2021.
This EUR 2 billion transaction offers a final spread of 41 basis points over the 3.000% OAT May-2033, equivalent to a reoffer yield of 3.455% and a reoffer price of 99.335%, for a coupon of 3.375%.
The joint lead managers for this transaction are Crédit Agricole CIB, Deutsche Bank, HSBC, Morgan Stanley and Natixis.
Thibaut Makarovsky, Head of Funding and Market Operations at AFD: “We are delighted to see investors demonstrating yet again a strong interest in the AFD signature and would like to thank them for their support. The orderbook closed at €7.9bn, level last reached in September 2021, which enabled AFD to tighten the spread vs. OAT by 2bps to reach 41 basis points and set the size of the offering to €2Bn, our maximum amount per line. Following this operation, the AFD has now concluded more than 60% of its 2023 funding programme”.
Execution and distribution:
AFD seized the supportive backdrop on Monday 22nd May to announce its new 10-year EUR Bond, due May 2033. In the morning of Tuesday 23rd May, books were officially opened with guidance communicated at 43 basis points area over 3.000% OAT May-2033.
The transaction was met with a strong high quality investor support early in the day, reaching over EUR 4.5 billion (incl. EUR 550 million JLM interest) before 10:45 CET and enabling spread to be set 2bps tighter at 41 basis points. Investors’ interest continued throughout the European morning and books closed just before 12:00 CET in excess of 7.9 billion (incl. EUR 550 million JLM interest), which enabled AFD to launch the deal and set the size at 2 billion. Allocations were released to the market at 13:10 CET and the transaction was priced at 13:58 CET with an annual coupon of 3.375% and a reoffer yield of 3.455%.
By Geography, this transaction outlined the strength of AFD’s pan European bandwidth with 25% allocated to Germany and Austria, 24% to France, but also 14% to UK and Ireland, 9% to Iberia, 8% to Italy, 5% to the Nordics, 4% to Switzerland and 3% to BeNeLux. The rest of the allocations (7%) went to Asian investors. In terms of allocation by investor type, high quality demand was central to this transaction with 35% allocated to Banks and Private Banks, 33% to Asset Managers, 15% to Central Banks and Official Institutions, 13% Insurers and Pension Funds, and 4% for others.
- Issuer: Agence Française de Développement
- Ratings: AA (S&P, negative) / AA- (Fitch, stable)
- Size of the transaction: EUR 2 billion
- Pricing Date: 23 May 2023
- Settlement date: 31 May 2023 (T+6)
- Maturity date: 25 May 2033
- Reoffer price: 99.335%
- Coupon: 3.375% Fixed annual, Act/Act (ICMA)
- Reoffer yield: 3.455%
- Re-offer Spread: OAT + 41 basis points
- Reference OAT: FRTR 3.000% May-2033
- Listing: Euronext Paris
- Governing Law: French
- ISIN FR001400I822
- Joint Lead Managers: CACIB, Deutsche Bank, HSBC, Morgan Stanley, Natixis
The geographical breakdown was 25% for Germany Austria, 24% for France, 14% for UK / Ireland, 9% for Iberia, 8% for Italy, 7% for Asia, 5% for Nordics, 4% for Switzerland, 3% for BeNeLux and 1% for other investors.
By investor type, 35% was allocated to Bank and Private Banks, 33% to Asset Managers, 15% to Central Banks / Official Institutions respectively, 13% to Insurers and Pension Funds and 4% to other investors.
Find out more: Investors page