- COVID-19: AfDB Raises $3bn to Support African Nations
Following the African Export-Import Bank (Afreximbank) moves to support African economies with $3 billion Pandemic Trade Impact Mitigation Facility (PATIMFA) as they grapple with the effect of coronavirus pandemic, the African Development Bank has also followed in that footstep and raised $3 billion through a three-year bond to help reduce the economic impact of the COVID-19 on Africa and her people.
In a statement released by the lender on Friday, the bank said the bond called Fight Covid-19 Social bond attracted interests from central banks and official institutions, bank treasuries, asset managers including socially responsible investors. The bank said the bond was oversubscribed by $1.6 billion as total bids of $4.6 billion were received.
“This is the largest social bond ever launched in international capital markets to date, and the largest dollar benchmark ever issued by the bank. It will pay an interest rate of 0.75 per cent,” it stated.
The bank said these were critical times for the continent as it several challenges due to the coronavirus pandemic.
Dr. Akinwumi Adesina, President, AfDB, said, “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 $3bn 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.”
The arrangers added that the order book for the record-breaking bond highlights investors’ interest and support for African Development Bank’s initiatives in Africa.
Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB, said, “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.”
A breakdown of the bond allocation shows 53 percent was allocated to central banks and official institutions; 27 percent to bank treasuries and 20 percent to asset managers.
Final distribution statistics were as follows: Europe (37 per cent), Americas (36 per cent), Asia (17 per cent) Africa (eight per cent) and Middle-East (one per cent).
