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African Development Bank Launches AUD$600 Million (USD$463.9 million) Kangaroo Social Bond

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Akinwumi Adesina - Investors King

The African Development Bank launched a A$600 million (US$463.9 million) 5.5-year Kangaroo bond, marking its return to the Australian dollar bond market.

The transaction, announced on 8 June, was led by Nomura and RBC Capital Markets. It is the institution’s first benchmark Kangaroo since early 2018 and its first in the mid-curve since 2015. It is also the largest AUD trade ever issued by the Bank. More than 30 investors participated in the deal, with a total order book of more than A$775 million, leading to an upsize of the trade from the announced size of A$250-300 million to the final size of A$600 million. These included a strong cohort of Australian investors, while fund managers were the major investor type.

African Development Bank Treasurer Hassatou N’sele said the Covid-19 pandemic had led to a rise in global issuances of social bonds.

“Following on from the ground breaking USD$3.1 bln 3 year ‘Fight Covid-19’ Social Bond we issued in 2020, we’re glad to see that public domestic markets, like the Kangaroo bond market, are now seeing similar development in terms of interest from dedicated ESG investors, which provided additional momentum enabling us to print the largest trade we’ve ever done in AUD”.

The African Development Bank’s social bonds have use of proceeds allocated to projects that alleviate or mitigate social issues such as improving access to electricity, water and sanitation, and improving livelihoods through flood-risk reduction and access to clean transportation and employment generation.

Recent KangaNews data show that the African Development Bank had A$1.75 billion of bonds mature between its 2015 benchmark deal and its most recent. Keith Werner, Manager of Capital Markets and Financial Operations, said 38 per cent of investors in the deal had a socially responsible investment approach and that the African Development Bank intends to issue more social bonds in Australian dollars.

“In addition to the important contribution that socially responsible investors had to the success of this trade, it’s also gratifying to see such a large portion of the investors (41%) were domestic, which is an area where we haven’t seen strong support historically. We look forward to leveraging this momentum and continue evaluating opportunities in the future in this market”, Werner said.

The Australian dollar is the fifth currency in which the African Development Bank has issued social bonds since it established the program in 2017, following deals in euros, US dollars, Norwegian kroner and Swedish kronor.

In December 2016, the African Development Bank launched its inaugural Kangaroo Green Bond. This transaction followed successful outings in USD and SEK Benchmark formats.

A Kangaroo bond is a foreign bond issued in the Australian market by non-Australian firms and is denominated in Australian currency. The bond is subject to the securities regulations of Australia. A Kangaroo bond is also known as a “matilda bond.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Bonds

Lagos State’s Series IV N125 Billion Bond Opens for Subscription

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Sanwo-olu - Investorsking

Lagos State Government has declared open it’s series IV N125 Billion bond under the state’s N500 Billion Bond Issuance Programme.

The subscription is scheduled to close at 2.00 pm on Wednesday, December 1, 2021, stated Coronation Merchant Bank Limited in an email forwarded to investors.

The email reads, “Coronation Merchant Bank Limited is pleased to announce that the Lagos State Government Series IV Bond of up to N125 Billion under the State’s N500 Billion Bond Issuance Programme is now open for subscription. The offer is scheduled to close at 2.00pm on Wednesday, December 1, 2021.”

Please see indicative terms of the offer below:

Lagos Bond

Click here to access the supporting offer documents indicated below.
  1. Series IV Bond Pricing Supplement
  2. Series IV Trust Deed
  3. The Series IV Bond Rating Report by Agusto & Co and Global Credit Rating Co.
  4. The Issuer’s Rating Report by Agusto and GCR
  5. The Issuer’s PENCOM Clearance Letter
  6. Commitment Form
  7. Eligible Individual Investor (EII) Form

For further enquiries, kindly reach out to any of the contacts below:

Suru Daniels
Investment Banking

07032999560
sdaniels@coronationmb.com

Oluwatomilola Ajayi
Investment Banking

08089957092
oajayi@coronationmb.com

Emeka Mmakwe
Investment Banking

08184998506
emmakwe@coronationmb.com  

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Bonds

Ardova Plc Announces N60 Billion Bond Programme

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Ardova

Ardova Plc,  a Nigerian leading indigenous and integrated energy company involved in the distribution of petroleum products, announced it has established a N60 billion bond programme.

The company also announced the successful issuance of N11,444,000,000 7-year 13.3 percent fixed-rate bonds and N13,856,000,000 10-year 13.65 percent fixed-rate bonds under the programme.

Ardova disclosed this in a statement signed by Oladeinde Nelson-Cole, Company Secretary/General Counsel.

It said “Ardova PLC is pleased to announce the establishment of its ₦60,000,000,000 (Sixty Billion Naira) bond issuance programme (the “Programme”) and the successful issuance of ₦11,444,000,000 (Eleven Billion, Four Hundred and Forty-Four Million Naira) 7-year 13.3% fixed rate bonds and ₦13,856,000,000 (Thirteen Billion, Eight Hundred and Fifty-Six Million Naira) 10-year 13.65% fixed rate bonds being tranches A and B respectively of the series 1 bonds under the Programme.”

The bonds are duly registered with the Securities and Exchange Commission. An application will be made to list the Bonds on the FMDQ Securities Exchange Limited.

Vetiva Capital Management Limited and Stanbic IBTC Capital Limited acted as Joint Issuing Houses, whilst Banwo & Ighodalo acted as Transaction Counsel. The trustees were advised by Aluko & Oyebode.

Commenting on the transaction, Mr. Olumide Adeosun, CEO of the Company said: “We are pleased with the successful conclusion of this transaction which again demonstrates investors’ confidence in the Company and provides additional resources for the Company to continue its expansion projects.”

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150bn FG Bonds for Auction in November

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Bonds- Investors King

The Debt Management Office (DMO), the government agency that coordinates the management of Nigeria’s debt, has said that Federal government N150bn bonds will be up for subscription this month.

In a circular available on the website of the Debt management agency, the bonds are to be auctioned on November 17 while the settlement date was set for November 19.

The Federal Agency had on September 17 announced the Federal government plans for Eurobond issuance in the international capital market (ICM). The issuance, as announced in September, was to avail local investors of the opportunity to invest.

Almost a month after, the federal government is up with N150 billion bonds. The bonds are broken into three with each worth N50bn.

A further breakdown available in the circular by DMO showed that the bonds are a 10-year re-opening bond offered at the rate of 12.50 percent and is to mature in January 2026. There is the 20-years re-opening bond to be offered at 16.2499 percent and will mature in April 2037. There is also a 30-year re-opening bond to be offered at 12.98 percent and mature in March 2050.

Similarly, according to the circular, the bonds will offer N1,000 per unit subject to a minimum subscription of N50,001,000 and in multiples of N1,000 thereafter.

The interest rate is payable semi-annually. For the interest rate, “For Re-opening of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument,” DMO said.

The circular also stated that the bond qualifies as a security. It read, “FNG bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.”

As regards redemption, the circular stipulated bullet repayment on the maturity date.

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