IDB launches $1.5 Billion Fixed Rate Bond

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new $1.5 billion long 3-year Global benchmark.

The transaction pays a semi-annual coupon of 4.375% and matures on February 1st, 2027. It was priced with a spread of 35 basis points over SOFR mid-swaps, which equates to 6.5 basis points over the reference U.S. Treasury and carries a semi-annual yield of 4.406%.

Moving towards the end of the year, IDB announced the transaction at the London open on Monday, December 4th, in the afternoon. The transaction received strong reception from the outset, attracting Indications of Interest (“IOIs”) in excess of $1.25 billion by the time books officially opened the following morning slightly after 08:00 a.m. UK time. The orderbook continued to grow throughout the day, with orderbooks exceeding $1.65 billion, setting the spread at SOFR MS+35bps on Tuesday morning.

Despite a volatile macroeconomic environment and a quiet year-end primary market, the transaction managed to attract strong investor demand in total, with the final orderbook in excess of $2.1 billion (excluding Joint Lead Managers interest), enabling IDB to successfully launch a $1.5 billion 3-year benchmark.

The success of the transaction outlined IDB’s strong name, being supported by a broad range of investor base globally. The orderbook was of superb quality, with Central Banks /Official Institutions & Banks / Bank Treasuries taking the lead with 52% and 32% of the final allocation, respectively.

“We decided to go ahead with another US dollar global benchmark for 2023 – our fifth one this year—to proactively fund prior to the anticipated busy calendar in January,” said Laura Fan, head of funding at the IDB. “Although we have already surpassed our 2023 borrowing target, this trade secures funding for the upcoming year and provides flexibility for the execution of the 2024 borrowing program.” 

Investor Distribution:

Bond Summary Terms:

Joint Lead Manager Quotes:

“IDB has managed to close the US dollar global benchmark season with a remarkable transaction, gathering the highest quality demand at the tightest spread to treasuries from any Supranational, Sovereigns and Agencies (SSA) this year. BNP Paribas is pleased to have brought to market this successful issue. Many congratulations to the IDB team!” Jamie Stirling, Managing Director, Global Head of SSA DCM at BNP Paribas.

''Congratulations to the entire Inter-American Development Bank (IDB) team on their long 3-years USD outing, which provides cost effective pre-funding ahead of the classic January rush when Issuers’ programs start anew.  With the onset of a rate rally seen over the last month, investors have wanted to take advantage of peak US rates. The transaction and indeed distribution is a testament to the IDB credit quality and haven bid the top-tier name garners''. Mark Yeomans, Managing Director, Nomura.

“An exceptional result marking IDB’s fifth USD benchmark of the year! Despite a challenging macroeconomic environment, demand was robust throughout the process with participation from over 66 investors, leading to a US$ 1.5 billion print. Congratulations to the IDB Team again, TD is delighted to have been part of this successful transaction.” Laura O'Connor, Managing Director, Head of UK DCM, TD Securities.

*This press release is not an offer for sale of the securities of the Inter-American Development Bank. Any offering of IDB securities will be made only by means of a prospectus or other definitive offering document that contains important information about the securities, the offering and IDB. Offerings of securities will be made only in compliance with applicable laws.