This issuance also represents AFD’s second benchmark of 2021, following the USD 2bn 5-year benchmark issued in January. The new 15-year marks the issuer’s first transaction in this part of the curve since November 2019, apart from a tap of an existing bond in June 2020.
The mandate was announced the day prior to issuing on Tuesday March 9th at 13:00 Paris time for a new EUR 15-year benchmark. Books opened the next morning at 9:00 Paris time, and the transaction went out with a guidance at OAT +25 bps area.
The first update on Wednesday was provided to markets at 10:30 Paris time with books in excess of EUR 4.5bn (excluding JLM interest) and a revised guidance of OAT + 23 bps (+1/-1 bp). The book kept growing to get to a size of EUR 4.8bn (excl. JLM interest) allowing to set the spread at OAT + 22 bps. The deal size was also set simultaneously at EUR 1.25bn.
The transaction priced at 13:36 Paris time at a a re-offer yield of 0.493% corresponding to a re-offer price of 98.277%, with a coupon of 0.375%.
This transaction was a true success with AFD gathering its largest orderbook ever, over EUR 5.1bn (excl. JLM interest). The orderbook was also made up of high quality orders with 42% of the bonds that were allocated to asset managers, 24% to insurance and pension funds, 20% to banks and private banks and 13% to central banks and official institutions. The book was well diversified outside of the domestic investors with 34% of allocation in France, 33% in Germany/ Austria/ Switzerland, 15% in Southern Europe, 7% in Northern Europe, 5% in Benelux and 2% in Asia, UK.
Thibaut Makarovsky, Head of funding and market operations: “Following our 5 year USD benchmark in January, the constructive market backdrop convinced us to move forward with our funding program and launch our first EUR transaction for 2021, a long benchmark that usually comes later in the year. By doing so we wanted to respond to ongoing demand in this part of the curve. Demand from investors exceeded our expectations with an exceptional orderbook. In addition, OAT + 22bps is the tightest spread for a EUR public benchmark since January 2017. This benchmark leads to 37% done of the 2021 funding program.”
Details of the transaction:
- Issue Size: EUR 1.25 billion
- Payment Date: 17/03/2021
- Maturity Date: 25/05/2036
- Coupon: 0.375% annual Act/Act ICMA
- Re-offer Price: 98.277%
- Re-offer Yield: 0.493%
- Re-offer Spread vs OAT: FRTR 1.250% May 36 + 22 bps
- Lead Managers: Citi, Crédit Agricole CIB, Goldman Sachs Bank Europe SE, Natixis, Société Générale
Investor split :
Contact details: AFD_Funding@afd.fr
