IDB prints largest SDB deal
April 22, 2020
DC-based development bank raises $4.25 bln for a $12 bln lending program in its second sale of dollar-denominated sustainable bonds this year
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The Inter-American Development Bank (IDB) said it priced $4.25 billion in sustainable development bonds (SDBs) on Tuesday, more than double its first SDB deal in US dollars on March 30.
The regional development bank placed the new three-year notes with a 0.5% coupon at a reoffer price of 99.97, equal to a yield of 0.511%, or 27.7 basis points over the 0.25% US Treasury notes due in April 2023 and 15 basis points over mid-swaps, the IDB said in a press release.
"This is IDB's largest ever public bond issuance, demonstrating the commitment of a global investor base to the IDB's strategic priorities and rigorous sustainability framework," the bank added.
Barclays, HSBC, Nomura and RBC were the joint lead managers, while Bank of America, BMO, Citi, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley, NatWest, TD Securities and Wells Fargo were the co-lead managers, according to the IDB.
The IDB offered a new issue concession of just one basis point and tightened the spread by four basis points for its largest ever benchmark bond sale in US dollars, Lee Cumbes, head of public sector financing in Europe, the Middle East and Africa (EMEA) at Barclays, was quoted as saying in the press release.
Central banks and other official institutions acquired 60% of the notes on offer, followed by commercial banks with 20%, asset managers with 18% and pension funds, insurance companies and corporate buyers with 2%. EMEA investors bought 36% of the notes, while bond buyers in the Americas acquired 32% and investors in Asia Pacific also got 32%, according to the IDB.
The latest bond deal came after the IDB formed a $12 billion lending program to deal with the financial impact of the coronavirus pandemic with a focus on immediate public healthcare response, safety nets for vulnerable populations, financing for small businesses and measures to support an economic recovery.
In late March, the IDB priced $2 billion in five-year SDBs at 46.2 basis points over the 0.5% US Treasury notes due in March 2025, its largest sustainable bond sale at the time and its first in US dollars. It also issued IDR55 billion ($3.53 billion) in three-year SDBs earlier this month in its second bond sale in Indonesian rupiahs this year, following a three-year deal for IDR1.37 trillion in early February.