Friday, March 29, 2024

African Development Bank launches record breaking $3 billion “Fight COVID-19” Social Bond

Landmark transaction, largest Social bond transaction to date in capital markets

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The African Development Bank (AfDB) (www.AfDB.org) has raised an exceptional $3 billion in a three-year bond to help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies.

The Fight Covid-19 Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including Socially Responsible Investors, with bids exceeding $4.6 billion. This is the largest Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%.

The African Development Bank Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.

“These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Akinwumi Adesina, President of the African Development Bank Group.

The order book for this record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.

“As the Covid-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure,” said Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.

Coronavirus cases were slow to arrive in Africa, but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems.

It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in desperate efforts to contain it. Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession.

Commenting on the landmark transaction, George Sager, Executive Director, SSA Syndicate, Goldman Sachs said: “In a time of unprecedented market volatility, the African Development Bank has been able to brave the capital markets in order to secure invaluable funding to help the efforts of the African continent’s fight against Covid-19. Not only that, but in the process, delivering their largest ever USD benchmark. A truly remarkable outcome both in terms of its purpose but also in terms of a USD financing”.

The Bank established its Social Bond framework in 2017 and raised the equivalent of $2 billion through issuances denominated in Euro and Norwegian krone. In 2018 the Bank was designated by financial markets, ‘Second most impressive social or sustainability bond issuer” at the Global Capital SRI Awards.

“We are thankful for the exceptional level of interest the Fight Covid-19 Social Bond has raised across the world, as the African Development Bank moves towards lessening the social and economic impact of the pandemic on a continent already severely constrained. Our Social bond program enables us to highlight our strong development mandate to the investor community, allowing them to play a part in improving the lives of the people of Africa. This was an exceptional outcome for an exceptional cause,” said Hassatou Diop N’Sele, Treasurer, African Development Bank.

Fight Covid-19 was allocated to central banks and official institutions (53%), bank treasuries (27%) and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).

Distributed by APO Group on behalf of African Development Bank Group (AfDB)

11 COMMENTS

  1. This is what needs to be happening forward thinking. People die all the time death is inevitable it’s not something to fear to the point that it halts and cripples everything in life. God’s grace is sufficient and surely many will been seen through this. However for the sake of those future generations our work must not stop. Others are working hard trying to find a cure and a vaccine to prevent future occurrences so why must we stop our work. The pandemic has brought a sudden increase in demand for certain things and once it is gone the demand will shift to other things, as the saying goes “life goes on”

  2. Great move by AfDB. I hope government takes advantage of this great move. I personally feel that GRZ is not doing much. Let the MP and Ministers go and interact with people in their constituencies and explain the pronouncements that were made by ECL other than them just enjoying the comfort of the big cars.
    I was at Soweto Market yesterday and what I saw was sad. People are free to mingle without observing Social Distances. Commuter buses are loading people in the usual manner. It was business as usual at Soweto Market. Why stop people from overcrowding at Churches and bars but do nothing about markets and buses? If we don’t come up with tough measures, we shall die like rats. Council and police should be very active this time around. In India/Pakistan, police are using sticks to…

  3. It will just be stolen, at least most of it. Can u trust African leaders to spend money properly in an emergency whn they fail to spend money properly in no-emergency situations? Be fair in your answer to this question.

  4. Now time for greedy African leaders and their cadres to enrich themselves…African leaders will start buying private jets and Presidential convoys etc and properties

  5. AfDB whatever you do…dont give those PF thieves, we will only see flats mushrooming all over the city without owners!!

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  6. Social Debts again, oh no people why not donate equitably to all nations on the the continent? The Lungus with the appetite of loans are already salivating for this and they will only buy musks and nappies for the patients and rest will be pocketed. These are the new generations of thieves.

  7. It takes one thief to identify another. Voices crying “Thief!” and “It will be stolen!” remind me of Judas Iscariot’s reaction when Christ was annointed with a bottle of expensive ointment: “It could have been sold and given to the poor..” he remarked, albeit with ulterior motives.

    Why not just applaud this great move by the African Development Bank to solve Africa’s problems? If European economies benefit from African resources, everybody is quiet but if African economies draw comfort from African social bonds, it becomes a crime! Why would anyone in their right mind build any hopes of enriching themselves in times like these when we’re dealing with life and death? If so, such elements will be undoubtedly be exposed and receive their very hard and deserved punishment.

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  8. What the World Bank who fund AFDB are thinking is… instead of buying ventilators and medicines these daft, greedy and selfish Africans will go and buy luxury SUVs and build gated communities right in the middle of poverty stricken and pot holed cities…so why not, it’s OK as the World Bank already finances the companies selling those Luxury Suvs as well as those cement companies selling them building materials for their individual personal housing projects. The World Bank wins again!

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  9. 2020vision get your facts right. World Bank doesn’t fund AfDB. The 2 institutions complement each other on several projects in Africa.

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