Despite a volatile market environment (acceleration of monetary policy tightening, high inflation combined with economic slowdown, ample intraday movements of benchmark rates), AFD seized an opportune market window in order to launch this new sustainable transaction with a 10-year maturity. After the announcement on Wednesday May 11th, the orderbooks for this new trade opened the next day at 09:28 CET. The guidance was communicated at 34 basis points area above the OAT curve (FRTR 0% 05/32).
The transaction has received strong interest from high quality investors, with particular attention brought to the sustainable format of the issue. At 11:24 CET, the orderbooks were in excess of € 2 billion with € 125 million of JLMs interest and the issuer decided to fix the spread at 33 basis points above the French OAT curve (FRTR 0% 05/32).
Despite the tightening of the spread, final demand from investors (real money accounts and ESG investors) continued to grow. At closing (12:30 CET), the size of the orderbooks was in excess of € 2.2 billion (€ 125 million of JLMs interest), allowing the issuer to announce the final size of the issuance at € 1.5 billion at 12:42 CET.
The sustainable transaction priced at 15:02 CET at a re-offer yield of 1.709% corresponding to a re-offer price of 99.232%, with a coupon of 1.625% and a spread of 33 basis points over the French curve. In terms of allocation by type of investor, the distribution of this new issuance was well diversified: Central Banks & Official Institutions took took 47% of the final allocation, Asset Managers – 39%, Banks – 11%, Insurances & Pension Funds – 2% and Hedge Funds – 1%.
Geographic distribution highlighted the strong presence of AFD's signature on the international capital markets: 42% of the trade were allocated in Asia, 21% - in the United Kingdom, 11% - in France, 8% - in BeNeLux, 6% - in Germany / Austria / Switzerland, 5% - in Americas 4% - in Scandinavia and 3% went to Southern Europe
Thibaut Makarovsky, Head of Funding and Market Operations at AFD: “This new transaction allows AFD to make significant progress in its 2022 financing program, while becoming a key issuer in sustainable finance. Investors welcomed this new sustainable issue, despite a volatile market environment. This is the fourth sustainable bond launched by AFD since the implementation of the SDG bond framework. This transaction allows us to secure 53% of our funding program for 2022.”
Details of the transaction:
- Issue expected ratings: AA (Stable)/AA (Negative) (S&P/Fitch)
- Format: Senior Unsecured, RegS Bearer Dematerialised
- Coupon: 1.625%, Fixed, Annual, ACT/ACT ICMA
- Size: € 1.5 billion
- Pricing Date: 12 May 2022
- Settlement Date: 19 May 2022 (T+5)
- Maturity Date: 25 May 2032 (10-year)
- Re-offer Price: 99.232%
- Re-offer Yield: 1.709%
- Re-offer spread vs OAT (Over the French curve (FRTR 0% 05/32): 33 bps
- Lead Managers: BofA Securities, Crédit Agricole CIB, J.P. Morgan, Natixis, Société Générale
- ISIN: FR001400ADF2
- Final Orderbook Size: € 2.2 billion (€ 125 million of JLMs interest)
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