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The African Export-Import Bank (Afreximbank) has announced that it has successfully acted as Joint Global Coordinator on the inaugural EUR 500 million RegS-only senior unsecured social bond issuance by the Arab Bank for Economic Development in Africa (BADEA) under its newly-established Euro Medium Term Note (EMTN) programme listed on the London Stock Exchange.

BADEA is a development finance institution established in 1974 by 18 member countries of the League of Arab States (LAS) to provide targeted developmental financing to 44 non-Arab Sub-Saharan African countries, with total assets of $5.7 billion as of June 2023.

BADEA issued a debut EUR 500mn 3-year social bond with use of proceeds to fund eligible projects under the issuer’s newly established Sustainable Finance Framework with focus on essential services – healthcare, education, and MSME financing – as well as food security, employment generation, and affordable housing sectors.

The bond issuance was 3.0x oversubscribed off peak orderbook EUR 1.5 billion and supported by over 50 high-quality institutional investors including central banks, DFIs, fund managers and commercial banks from Africa, Middle East, Europe, UK and US offshore accounts. The 3-year bond was priced at 100bps over EUR midswap rate to yield 3.806% (annual fixed coupon 3.750%) well inside initial price thoughts of 120-125bp respectively.

Professor Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, commented on the transaction: “We are delighted to support our sister organisation BADEA’s market foray as the first thematic bond as well as first Investment Grade-rated DFI bond to be led by Afreximbank reaffirming our drive to deepen capital market access for African issuers under all market conditions.”

Sidi Ould-Tah, President of BADEA, also remarked on the transaction: “We are pleased with Afreximbank’s strategic contribution in placing our maiden bond with high-quality anchor investors in a manner that enables BADEA to channel greater Arab African development funding towards sectors of highest social multiplier impact.”

Afreximbank, through its Advisory and Capital Markets (ACMA) department, acted as Joint Global Coordinator on BADEA’s bond issuance alongside international banking partners as Joint Global Coordinators and Joint Lead Managers.