AfDB raises €1bn through five-year social bond as orders exceed €1.75bn

The African Development Bank (AfDB) has raised €1 billion through a five-year social benchmark bond, attracting investor orders exceeding €1.75 billion as it advances towards completing its 2026 borrowing programme.

The transaction was priced on 14 October 2026, with an annual coupon of 3.500% and a reoffer yield of 3.562%. The notes mature on 21 October 2031 and were issued at a reoffer price of 99.721% of their face value.

The orderbook included €200 million of joint lead manager interest, with the final demand reflecting subscriptions from institutional investors across Europe, the United Kingdom, Asia, and the Middle East and Africa.

The issuance represents AfDB’s second euro-denominated global benchmark bond of 2026, following its €1.25 billion seven-year social benchmark bond issued in June. It brings the bank’s year-to-date funding to US$11.5 billion, equivalent to 96% of its borrowing programme for the year.

Investor distribution

European investors accounted for the largest share of allocations, with investors from Europe excluding the United Kingdom receiving 44% and UK investors accounting for 31%. Asia represented 15% of allocations, while investors from the Middle East and Africa received the remaining 10%.

By investor type, banks accounted for 40% of allocations, followed by central banks and official institutions at 38%. Asset managers received the remaining 22%.

Use of proceeds

The bond was priced at 10 basis points above the euro mid-swap rate, equivalent to a spread of 31.1 basis points over the German government bond benchmark, the 2.900% note due 8 October 2031.

Proceeds from the issuance will finance eligible social projects under AfDB’s Sustainable Bond Framework, which supports economic development and social progress across Africa.

The bank said the transaction demonstrated continued investor demand for its social bond format and highlighted its environmental, social and governance credentials.

AfDB carries credit ratings of Aaa from Moody’s and AAA from S&P Global Ratings, Fitch Ratings and Japan Credit Rating Agency, all with stable outlooks.

Barclays, Deutsche Bank, HSBC and Natixis acted as joint lead managers on the transaction. Settlement is scheduled for 21 October 2026.