AfDB: World’s first 10-year $ bond in a dual-tranche transaction

The interest rate obtained of 4.5%, not far from 10-year US government bonds, and the fact that investors did not activate the stabilization period, reflect confidence in the institution, which is in a period of transition following the election of its new president.

For the first time, the African Development Bank (AfDB) has issued global bonds in US dollars (USD) with a 10-year maturity, according to an information memo from J.P. Morgan Securities, lead arranger for the transaction, relayed by several specialist media. The $1 billion issue is part of a double-tranche operation that enabled the pan-African development finance institution to raise a further $2 billion via a loan repayable in three years.

This success comes at a time of transition for the AfDB presidency, following the end of Akinwumi Adesina’s two mandates. At the Annual Meetings held from May 26 to 30, 2025, he highlighted the confidence of international investors as one of his major achievements, along with maintaining the institution’s AAA rating. This operation can also be seen as a vote of confidence in the newly elected Chairman, Dr. Sidi Ould Tah, who has forged a solid reputation for himself at the helm of the Arab Bank for Economic Development in Africa (BADEA).

Market confidence is evident on two levels. Although the AfDB is mainly exposed to countries whose economic players operate in jurisdictions rated B or below, its 10-year $ bond achieved a coupon of 4.5%, very close to the yield on US federal government bonds (4.35%) over a similar period. Furthermore, J.P. Morgan Securities reports that no market stabilization intervention was required, demonstrating the smooth absorption of the bonds by investors.

source: Agence ecofin