AfDB prices SEK 1 billion Green Bond due March 2019

On Thursday, March 6, 2014, the African Development Bank (AfDB) launched its second Swedish Krona (SEK) Green Bond transaction.

Coming after its inaugural SEK 5-year Green Bond in floating rate format, AfDB took advantage of the strong positive momentum and demand created from the first deal to follow up with another SEK 1 billion 5-year transaction – this time in fixed rate format.

Transaction Highlights:

• The transaction has a 5-year maturity matched to the Swedish Government Bond (SGB 1052) and was priced at 5-year mid-swap Flat, equivalent to a yield of 1.865%, and a spread of 38.5 basis points to the SGB 1052 at time of pricing.
• Swedish domestic demand accounted for the majority of the transaction and non-domestic investors attracted by AfDB’s SEK Green Bond participated with 15% of the order book.
• The transaction was placed with 16 investors including AP2, AP3, Landstinget Västmanland, SAAB Pensionsstiftelse, SEB Fonder, SPP/Storebrand, Svenska Kyrkan, and Systembolaget AB.
• The new bond is AfDB’s third Green Bond transaction under its new Green Bond Framework
• Nordea Markets was the sole lead manager for the transaction.

“We are delighted to return so swiftly to the SEK bond market with our Green Bond transaction,” said Pierre Van Peteghem, Treasurer, African Development Bank. “Our Ten-Year Strategy adopted last year has a clear objective of helping Africa gradually transition to growth that is green and promotes the sustainable use of the natural resources of the continent. We are delighted by the demand for the bond that again highlights the important role capital market investors have in supporting us in fulfilling our development mandate in Africa.”

“Nordea is immensely proud to have introduced AfDB to the Swedish Krona market and SRI investors through two consecutive successful Green Bond transactions,” said Kamal Grossard-Amin, Director and Head of SSA Origination, Nordea. “It is another milestone for AfDB and the development of the Green Bond market. With its second Swedish Krona benchmark within weeks, the African Development Bank has created a significant footprint in the Nordic market. The reception of AfDB’s Green Bond transactions has been outstanding, and the bonds will serve as references for AfDB as well as other SSA issuers in this market.”