October 26, 2021

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AfDB launches $463.9m Australian bond

The African Development Bank (AfDB) has launched its five-year A$600 million (US$463.9m) Kangaroo bond in the Australian dollar bond market.

A Kangaroo or Matilda bond is a foreign bond issued in the Australian market by non-Australian firms and is denominated in Australian currency, said the bank in a statement.

The transaction led by Nomura and RBC Capital Markets is the largest Australian Dollar (AUD) trade ever issued by the bank.

Over 30 investors participated in the deal, with a total order book of more than A$ 775m, leading to an upsize of the trade from the initial A$250-300m to the final size of A$600m.

These included a strong cohort of Australian investors, while fund managers were the major investor type.

AfDB Treasurer, Hassatou N’sele said the COVID-19 pandemic had led to a rise in global issuances of social bonds.

“Following on from the groundbreaking USD3.1 billion 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 bank said it has used social bond proceeds for 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.