IDB launches $2.3 billion 2.375% 10-Year fixed-rate global bond

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new $2.3 billion 10-year global bond on June 28, 2017.

The transaction pays a semi-annual coupon of 2.375% and matures on July 7, 2027. Priced with a spread of +21.3 basis points over the UST due 2.375% due 05/2027, this represents a yield of 2.429% s.a.

This transaction is the IDB’s third public benchmark transaction of 2017, following very successful 5- and 3-year outings in January and April, respectively. With the addition of today’s new 10-year transaction, IDB has completed $12.4 billion of an estimated $18.5 billion program for 2017.

This transaction completes and extends IDB’s USD curve with a current 10-year benchmark. At $2.3 billion, this is the IDB’s largest 10-year benchmark and the largest 10-year benchmark in the sector since July 2015.

The orderbook was significantly oversubscribed, with over $3.5 billion of orders and more than 65 investors participating.

“We contemplated a $1 to $1.5 billion deal and were pleasantly surprised to see how quickly the book grew in the various time zones. The strong demand allowed us to print $2.3 billion. That is a record primary issuance size for us in the 10-year tenor,” noted IDB Head of Funding Laura Fan.

Investor Distribution

By Region               By Investor Type

Americas 37%         Central banks/official institutions 39%

EMEA 32%              Banks/private banks 38%

Asia Pacific 31%      Asset managers 20%

                                Pension funds/insurance/corps 3%

Bond Summary Terms

Issuer: Inter-American Development Bank (Ticker IADB)

Issuer rating: Aaa / AAA (Moody’s / S&P)

Amount: USD2.3 billion

Settlement date: 7 July 2017 (T+7)

Coupon: 2.375%

Coupon payment dates: 7 July and 7 January (semi-annual)

Maturity date: 7 July 2027

Issue price: 99.523%

Issue yield: 2.429% s.a.

Reoffer spread: Mid-Swaps 24 / CT10 +

Listing: London Stock Exchange

Clearing systems: Fedwire, Euroclear, Clearstream

Joint lead managers: Barclays, CITI, TD

Co-lead managers: BAML, BMO, BNP, Deutsche, HSBC, JPM, Mizuho, Nomura, RBC,

Wells Fargo

ISIN / CUISIP: US4581X0CY26/ 4581X0CY2

Reactions from the Joint Lead Managers

“This is another landmark transaction for the IDB and makes a strong statement about the depth of demand for their name at all parts of the curve. IDB achieved a very well diversified order book, with strong interest from bank treasuries and central banks, allowing them to issue the largest 10-year Supra/Agency benchmark in this maturity since July 2015,” commented Lee Cumbes, Managing Director, Head of Public Sector EMEA, Barclays.

“IDB has enhanced its already impressive reputation in long dated US Dollar financing with this fabulous transaction. The strength and diversification of the order book reflects the leading status which IDB enjoys among the global rates investing community,” said Philip Brown, Head of Public Sector DCM, Citi.

“This is an outstanding 10-year USD benchmark from the IDB. The deal was well-timed and offered investors a unique high-quality liquid asset in the long end of the curve. The size and range of accounts in the order book was impressive, confirming the appeal of the credit and the market leadership of the issuer in the USD global market,” observed Laura O'Connor, Vice President, Fixed Income Origination & Syndication, TD Securities.