AfDB secures $2.5bn funding as investor orders reach $4.8bn

Tah sworn in as ninth AfDB president in Abidjan Photo credit: X

The African Development Bank has raised $2.5bn from international investors through a three-year dollar bond, attracting orders worth $4.8bn as demand exceeded the amount available by nearly 92 per cent.

The transaction gives the multilateral lender access to funds for its operations and development priorities across Africa, while strong investor demand enabled it to secure slightly better pricing than initially proposed.

In a statement published on its website, the bank said the bond was priced on 21 October, 2026, with maturity scheduled for 18 January, 2030.

The debt carries a fixed annual interest rate of 4.875 per cent, while its re-offer yield was set at 4.933 per cent. Interest will be paid twice a year, with settlement scheduled for 2 November, 2026.

The final order book of $4.8bn was almost twice the $2.5bn raised, indicating that investors submitted substantially more demand than the bank needed to meet its funding target.

The AfDB initially offered the bond at a spread of about 30 basis points above the Secured Overnight Financing Rate mid-swaps, a benchmark used to price dollar-denominated debt.

However, as investor interest increased, the bank reduced the spread to 28 basis points above the benchmark.

The final pricing reflected a two-basis-point improvement on the initial guidance, lowering the additional return investors received over the reference rate.

Related News

• Unilever declares N11.5bn interim dividend as profit grows
• Nigeria, UK deepen ties on AI, digital trade standards
• U-17 World Cup: Flamingos eye quarter-final place against Mexico

The bond was priced at 99.837 per cent of its face value, with a yield of 4.933 per cent.

The latest transaction is the bank’s third US dollar benchmark bond issuance this year, following a $1bn 10-year bond in January and a $2bn five-year bond in February.

AfDB also returned to the sterling debt market in January with a £1bn three-year benchmark bond due in January 2029.

The series of transactions forms part of the bank’s international borrowing programme, which helps it raise funds to finance development activities across the continent.

Strong demand for the latest dollar bond may also support the bank’s ability to access international capital markets on competitive terms, although borrowing costs remain influenced by global interest rates and investor appetite for debt.

In a separate development, Nigeria and the AfDB have agreed to review the country’s $6.2bn project portfolio to identify obstacles delaying implementation and improve delivery.

The review is intended to address project bottlenecks and align ongoing bank-supported initiatives with the Federal Government’s priorities.