AFD priced its first dollar transaction in 2023 with a USD 1.75bn 3-year issue

• USD 1.75bn – 3-year tenor – 4.5% coupon
• Largest issue size for AFD since 2020 for a USD 3-year issue

On Thursday, February 9, 2023, Agence Française de Développement (AFD), rated AA (S&P) / AA (Fitch) launched a new bond issue of USD1.75 billion with 3-years tenor. This is AFD's third benchmark  transaction this year after having issued on the sterling and euro markets, and marks its return to the USD market. This transaction is a success for AFD with the largest orderbook since 2020 on a dollar transaction.

This new transaction was announced at 1:00pm CET on Wednesday, February 8, with IPTs of 44bps above the benchmark SOFR Mid-Swaps curve. Despite the large volumes of new primary issues in the USD market during the week, the transaction triggered rapidly strong interest from the market with many investors showing appetite even before the official opening of the orderbook on Thursday.

Indications of interest exceeded USD 1bn when the order book officially opened the following morning at 9:18am CET, with an indicative guidance unchanged at +44bps above the SOFR MS curve.

At 11:06am CET, the orderbook was reaching nearly USD 2bn at 11:06am CET, allowing AFD to set the final spread at 44bps above the SOFR MS curve. Investors’ interest continued throughout the European morning and the orderbook was in excess USD 2.4bn around 1pm CET. The final orderbook closed at 2:53pm CET above USD 2.6bn, allowing AFD to set the final size at USD 1.75bn.

In terms of allocation by type of investor, the distribution of this dollar transaction benefitted from a high quality demand: 65% of the bonds have been placed with central banks and official institutions, 22% with banks and 13% with fund managers, insurers and others. In terms of geographical distribution, 38% were placed in Europe, 35% in the Americas, 16% were placed in Asia and 11% in the Middle East and Africa.

Thibaut Makarovsky, Head of Funding and Market Operations at AFD :  “We are delighted with the success of this operation and the renewed support from investors, during a week when the primary market was particularly active. AFD has already achieved 43% of its 2023 financing program, on a target of EUR 9 billion, thus securing the means necessary for its activity."

Transaction statistics:

Main characteristics of the transaction:

• Issue Size: USD 1.75 billion
• Pricing date: February 9, 2023
• Value Date: February 17, 2023 (T+6)    
• Maturity date: February 17, 2026
• Coupon: 4.5% annual
• Re-offer price: 99.926 %
• Yield Reoffer: 4.477% semi-annual
• Re-offer vs. SOFR Mid Swaps: +44bps
• Re-offer spread vs. Benchmark: +36.5 bps above T 4 02/15/26
• Leaders: BofA Securities, CACIB, Goldman Sachs, JP Morgan, Societe Generale
• ISIN: FR001400FVZ1