The Inter-American Development Bank (IDB) has priced a new US$1.5 billion long three-year global benchmark.
The Washington DC-based multilateral indicated in a statement that the transaction pays a semi-annual coupon of 4.375 per cent and matures on February 1, 2027. It was priced with a spread of 35 basis points over SOFR mid-swaps, which equates to 6.5 basis points over the reference US Treasury and carries a semi-annual yield of 4.406 per cent.
Moving towards the end of the year, IDB announced the transaction at the London open on December 4. The transaction received strong reception from the outset, attracting indications of interest (IOIs) in excess of $1.25 billion by the time books officially opened the following morning slightly after 08:00 am UK time. The orderbook continued to grow throughout the day, with orderbooks exceeding $1.65 billion, setting the spread at SOFR MS+35bps on December 5.
Despite a volatile macroeconomic environment and a quiet year-end primary market, the transaction managed to attract strong investor demand in total, with the final orderbook in excess of $2.1 billion (excluding Joint Lead Managers interest), enabling IDB to successfully launch a $1.5 billion 3-year benchmark.
The success of the transaction outlined IDB’s strong name, being supported by a broad range of investor base globally. The orderbook was of superb quality, with central banks/official institutions & banks/bank treasuries taking the lead with 52 per cent and 32 per cent of the final allocation, respectively.
“We decided to go ahead with another US dollar global benchmark for 2023 – our fifth one this year—to proactively fund prior to the anticipated busy calendar in January,” said Laura Fan, head of funding at the IDB. “Although we have already surpassed our 2023 borrowing target, this trade secures funding for the upcoming year and provides flexibility for the execution of the 2024 borrowing program.”
Investor distribution:
| Geographic Region | Investor Type | ||
| Americas | 30% | Central Banks / Official Institutions | 52% |
| EMEA | 47% | Banks | 32% |
| Asia & Pacific | 23% | Asset Managers | 15% |
| Pension Funds / Insurance / Corp | 1% |
Bond summary terms:
| Issuer: | Inter-American Development Bank (Ticker: IADB) |
| Issuer rating: | Aaa / AAA (Moody’s / S&P) |
| Amount: | USD 1.5 billion |
| Settlement date: | 12 December 2023 (T+5) |
| Coupon: | 4.375%, Fixed, SA 30/360, short first |
| Coupon payment dates: | 1st February and 1st August each year (semi-annually) |
| Maturity date: | 1st February 2027 |
| Re-offer | 99.915 / 4.406% |
| Reoffer spread (bps): | SOFR MS SA 30/360 +35bps |
| Listing: | London Stock Exchange |
| Clearing systems: | Fedwire, Euroclear, Clearstream |
| Joint lead managers: | BNP Paribas, Nomura International plc, The Toronto-Dominion Bank |
| Co-lead managers: | Barclays, BMO Capital Markets, BofA Securities, CIBC Capital Markets, Deutsche Bank, HSBC Bank, J.P. Morgan, RBC Capital Markets, Scotiabank, Wells Fargo Securities |
| ISIN: | US4581X0EM69 |
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