The African Development Bank has announced that it will hold investor calls across the globe for its new asset class, the global hybrid capital issuance.
According to a statement issued by the pan-African bank, the investor calls will be held in New York, London, and Paris.
In July, the development bank successfully priced an inaugural GBP 300 million (no-grow) 2-year Global Benchmark transaction, in a Social Bond format, due August 2025 at UKT 0.625 per cent, Jun-25 + 65bps.
Also, the S&P Global has given the transaction a high rating and the bank is committed to using the funds to finance a combined portfolio of eligible green and social projects.
BNP Paribas and Goldman Sachs International are joint structuring agents and global coordinators on the deal. Joint Structuring Agents and Joint Global Coordinators include Barclays, BNP Paribas, BofA Securities with Goldman Sachs International as joint bookrunners.
“This is a great new way to enhance a multilateral development bank’s capital base and optimise its balance sheet. The African Development Bank is starting a new asset class, hybrid capital, issued by AAA-rated multilateral development banks,” said the Bank’s Vice President for Finance and Chief Financial Officer, Hassatou N’Sele.
Acting Treasurer, Omar Sefiani, noted that this hybrid capital transaction will open new opportunities for the bank and other AAA-rated multilateral development banks to boost lending by tapping private investors.
“While the bank has been very active in generating additional lending capacity through risk reduction transactions on its assets, this transaction boosts its capital base and thus generates additional lending through its liabilities,”Sefiani stated.
The bank said that hybrid capital will have a multiplier effect on the bank’s financing, and allow for the issuance of additional green, social and sustainability bonds to finance projects targeting some of the continent’s most critical development challenges, including food security, access to water and sanitation, health services, and climate change.
