IDB issues its largest ever 10-year fixed-rate global Sustainable Development Bond

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new $4 billion 10-year fixed-rate global benchmark.

The transaction pays a semi-annual coupon of 1.125% and matures on January 13, 2031. It was priced with a spread of 13.65 basis points over the 0.875% UST due November 15, 2030, which translates to a semi-annual yield of 1.181 %.

The transaction is IDB’s first benchmark of 2021 across all currencies and represents IDB’s first 10-year benchmark in over a year. At $4 billion, the trade stands as IDB’s largest-ever USD 10-year fixed-rate benchmark.

“We are thrilled to start the new year with our largest ever 10-year USD global benchmark. The higher than expected investor demand propelled us to the $4 billion size which is double our originally envisioned $2 billion. The lack of long-dated USD SSA supply, higher yields as well as the Sustainable Development Bond format contributed to the resounding success,” said Laura Fan, Head of Funding at the IDB.

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“Responding to investors' bid for duration and incremental yield, IDB kicked-off the new year by reopening the 10-year maturity in impressive fashion. The transaction attracted tremendous support from over 100 buyers, paving the way for IDB to print its largest 10-year benchmark ever, while pricing at the tightest re-offer spread to mid-swaps since IDB’s last 10-year issuance. As the first 10-year USD SSA deal of 2021, this offering sets the bar high for others looking to follow,” said Sean Hayes, Managing Director & Head of US Syndicate & Credit Sales, BMO Capital Markets.

"Congratulations to the IDB team, who at USD 4 billion have issued their largest 10yr transaction to date. Their timing was excellent in the context of a rising treasury yield environment and was rewarded with exceptionally high-quality investor interest. This line will provide a valuable long-dated, liquid reference point to their USD curve for many years to come," said Adrien de Naurois, SSA Syndicate, Bank of America.

“We congratulate the IDB team for beginning the 2021 funding programme with their largest 10-year USD Global Benchmark in history. Following a back-up in USD rates, this Sustainable Development bond attracted high-quality demand from a broad range of investors, particularly the central bank community. This transaction is a remarkable return for IDB to the 10-year part of the curve,” said Laura O'Connor, Managing Director, Fixed Income Origination & Syndication, TD Securities.

“An exceptional outcome for the IDB on its return to the 10-year part of the curve. Again, the IDB has shown its agility in taking advantage of conducive market conditions following the uptick in yields and attractive steepness of the USD SSA ASW curve. The quality and granularity of the order book was exceptional, a true testament to IDB’s broad investor following, despite only a very limited new issue concession. This transaction was a great achievement all around and sets the right tone for IDB’s ambitious USD 25 billion borrowing programme,” said Katrin Wehle, Managing Director, SSA DCM at Deutsche Bank.