AFD SUCCESSFULLY PRICES A NEW 5.375% US$1.5 BILLION SUSTAINABLE BENCHMARK DUE 24TH OCTOBER 2025

PUBLISHED ON 17 OCTOBER 2023

On Tuesday 17th October, Agence Française de Développement (AFD), rated AA /AA- (S&P / Fitch), issued its second US dollar benchmark of the year, a US$1.5 billion 2-year sustainable benchmark due on the 24th October 2025 which offers a spread of 40bps over the SOFR mid-swap curve. This transaction is a success for AFD with the largest orderbook since 2020 on a dollar transaction.

With a supportive market backdrop, the transaction was announced at 13:20 CET on Monday 16th October 2023. At the same time as the mandate announcement, IPTs were also announced for the USD benchmark at SOFR MS+42bps area. Despite the tense geopolitical environment and crowded pipeline in the USD market, the transaction attracted solid demand from the onset, with IoI’s exceeding US$1.4bn. Books opened the following morning at 09:15 CET with guidance set at SOFR MS+41bps area.

The orderbook witnessed strong momentum throughout the bookbuilding process, allowing the issuer to set the spread at 11:53 CET at SOFR MS+40bps as books were in excess of US$2.8bn (excl. JLM Interest).

The orderbook continued to grow and closed at 14:30 CET north of US$3.7bn (excl. JLM Interest) allowing the issuer to set the size at US$1.5 billion representing an oversubscription rate of ~2.5x. This also represents AFD’s largest ever 2-year orderbook.

In terms of allocations, the transaction was well supported by high-quality, and geographically diverse investor demand. Central Banks and Official Institutions represented the largest pool of demand, accounting for 66% of final allocations followed by Banks with 18%, Asset Managers with 13%.

By geography, Europe represented the largest share of allocations with 43%, followed by Americas with 32%, Asia with 14% and Middle East & Africa taking the final 11%.

Thibaut Makarovsky, Head of Funding and Market Operations at AFD: “We were delighted to be able to finalise our funding programme for 2023 with such a good outcome on the transaction despite challenging market conditions and a difficult geopolitical backdrop over the past few weeks. We value the support from our investorbase which was evidenced by this book being the largest USD book since 2020.”

Details of the transaction

Issuer: Agence Française de Développement
Ratings: AA Negative outlook (S&P) / AA- Stable outlook (Fitch)
Size of the transaction: US$ 1,500,000,000
Pricing Date: 17th October 2023
Settlement date: 24th October 2023 (T+5)
Maturity Date: 24th October 2025
Reoffer Price: 99.664%
Coupon: 5.375% Fixed, Annual, 30/360
Reoffer Yield: 5.482% Semi-Annual / 5.557% Annual
Reoffer Spread vs SOFR Mid Swaps: +40bps
Reoffer Spread vs Benchmark: +28.675bps above T 5% 09/30/2025
Listing: Euronext Paris
Governing Law: French
ISIN: FR001400LKC1
Joint Lead Managers: Barclays, BNP Paribas, Goldman Sachs Bank Europe SE, J.P. Morgan, Société Générale
Use of Proceeds: SDG Bond Framework