The Inter-American Development Bank priced a new US$2.5 billion 10-year Global Sustainable Development Bond benchmark.

The transaction pays a semi-annual coupon of 4.375 per cent and matures on July 17, 2034. It was priced with a spread of 56 basis points over SOFR mid-swaps, which equates to 15.6 basis points over 4.304 per cent US Treasury. It is due May 2034 and carries a semi-annual yield of 4.460 per cent.

Final books closed above US$5.8 billion with 118 accounts participating. The broad and global distribution of this transaction demonstrates IDB’s firm support within the global investor community.

“We are pleased with the strong outcome of this transaction,” said Laura Fan, IDB Head of Funding. “The size exceeded our expectations, and it is one of the largest supranational 10-year bonds issued this year. The volume also highlights the robust investor interest in sustainability as this is the first Sustainable Development Bond (SDB) issued under our updated SDB Framework.” 

Investor distribution:

Bond summary terms:

Sean Hayes, managing director and global head of syndicate at BMO Capital, praised the IDB saying, “Congratulations to the IDB team on its successful return with a 10-year benchmark offering, and its first USD Sustainable Development Bond since early 2023. The undersupplied 10-year maturity received strong support, demonstrated by final demand in excess of $5.8 billion. The resounding interest from global investors allowed IDB to both tighten the spread and print impressive $2.5 billion size, larger than recent outcomes in the tenor.”

Kamini Sumra, managing director of SSA DCM, BofA Securities, added: “Many congratulations to the IDB team on a successful return to the 10-year maturity. The $2.5 billion deal size demonstrates that investor demand for duration remains strong for top-tier credits despite recent volatility. The new 10-year garnered support from robust and diversified high-quality investors and is a testament not only to IDB’s track record in bringing well-placed liquid benchmarks but also the global recognition of IDB’s Sustainable Development programme. BofA is delighted to have been involved.”   

“Congratulations to the IDB team for their successful return to the dollar market, following the 5-year benchmark in January. The deal priced with one of the tightest US Treasury spreads seen this year for a 10-year. Today’s new issue also distinguishes IDB as being part of the very few Sovereign, supranational, and agency issuers able to provide a 10-year benchmark above the $2 billion threshold in 2024. As the first trade under their updated Sustainable Development Bond Framework, the diverse order book composition is a strong vote of confidence in IDB’s commitment to sustainability, as well as their mission to reduce poverty and inequality in Latin America and the Caribbean. We are delighted to be involved,” said Ebba Wexler, head of global sovereign, supranational and agency (SSA) DCM, Citi.