30 March 2020
The African Development Bank (AfDB) issued its first ever dual-tranche social bond, denominated in Norwegian krone and Swedish krona, in April 2019.
The transaction raised NOK500 million ($58 million) from its three-year social bond and SEK1.25 billion ($135 million) from its five-year green bond. The lead manager for the transaction was SEB.
The social bond, which had a coupon of 1.5%, was the first social bond issued in the Norwegian market, along with being the first ever transaction denominated in Norwegian krone and issued by the AfDB, and the third social bond issued under the supranational's social bond framework.
The proceeds from the bond are intended to finance projects targeting residents in some of the poorest areas and include water supply, sanitation, healthcare, housing, financial development, Information and communications technology, agriculture and food security, rural electrification and education.
Issuer: African Development Bank
Size: NOK500 million ($58 million); SEK1.25 billion ($135 million)
Maturity: 11 April 2022; 11 April 2024
Coupon: 1.5%; 0.375%
Use of proceeds: Socioeconomic advancement and empowerment, food security, affordable basic infrastructure, access to essential services, pollution prevention and control, renewable energy, sustainable water management
External review: Sustainalytics
Lead managers: SEB
Credit rating: Moody's (Aaa); S&P (AAA); Fitch (AAA)
Other highlights/notable features: First ever social bond issued in the Norwegian market.
Hassatou N'Sele, treasurer of the AfDB Group, said both tranches "were driven by strong Scandinavian demand, a region that has been a very strong supporter of the sustainable investment market".
"The AfDB's Social and Green Bond programmes allow the Bank to highlight its development mandate to the investor community and enables them to ensure that they too can play a significant part in improving the lives of the people of Africa," N'Sele added.
Christopher Flensborg, SEB's head of climate & sustainable finance in large corporates & financial institutions, said: "It is inspiring to observe how the African Development Bank sources global capital to finance, lead and develop a strong platform for inclusive and environmental growth across Africa.
"We know from many of our investors that the ability to participate in Africa through AfDB's triple-A rating is highly appreciated and we look forward to many more transactions like this."