IDB launches $2.5 Billion 0.250% Long 3-year Fixed Rate Global

Washington, D.C. – The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new $2.5 billion Long 3-year global benchmark.

The transaction pays a semi-annual coupon of 0.250% and matures on November 15, 2023. It was priced with a spread of 5 basis points over mid-swaps, which equates to 11.4 basis points over the 0.125% UST due August, 2023 and carries a semi-annual yield of 0.300%.

This transaction marks IDB’s fifth USD fixed-rate benchmark of 2020 – three conventional transactions and two Sustainable Development Bonds (“SDB”) in response to the COVID-19 pandemic, following IDB’s announcement that it would direct up to $12 billion of additional lending to support countries in their response to the COVID-19 pandemic and its consequences.

IDB started the year with a $3 billion 5-year global issue in January, followed by a $2 billion 5-year SDB in March, a $4.25 billion 3-year SDB in April, and a $4 billion 5-year global issue in June.

This latest $2.5 billion long 3-year outing enjoyed strong support from investors with indication of interests (IOIs) in excess of $2.2 billion and final orders in excess of $2.8 billion across 68 investors. The success of this transaction reflects the strong IDB credit enjoyed with investors globally. The strength of the order book was underscored by the high participation of Central Banks and Official Institutions, whom accounted for 37% of the final allocation.

“Given the recent SSA supply in the long-end, we targeted the 3-year part of the curve. This trade is the second 3-year IDB US dollar global benchmark transaction for 2020. It is also our last US dollar global benchmark for 2020 in this maturity. The strong support from a diverse set of investors allowed us to print a solid $2.5 billion transaction,” says Laura Fan, Head of Funding at the IDB.

Investor Distribution:

Overview of the IDB:

The IDB is a multilateral development institution established in 1959. It is the largest government owned regional source of development finance for Latin America and the Caribbean. The IDB is owned by 48 countries, including 26 Latin American and Caribbean countries and 22 non-borrowing member countries.

Information on bonds for investors is available on the IDB website: http://www.iadb.org/investors

Bond Summary Terms:

Joint Lead Manager Quotes:

“Well done to the IDB for another smoothly executed transaction. The IDB’s credit quality was clearly demonstrated as they matched the equal tightest 3-year print from a supranational borrower in 2020. The quality of the orderbook also highlights that they continue to be incredibly well supported by the global investor base.”

Lee Cumbes, Head of Public Sector, Barclays.

“Deutsche Bank is honored to lead another fabulous transaction for the IDB in its fifth visit to the USD market this year. IDB picked an excellent window to fill continued demand at the shorter end of the curve with the first 3-year USD Global after the summer break. Once again, the IDB secured quality orders from a broad range of investors globally which reflects the issuer’s global appeal and value attached to the IDB name. The high-quality distribution into the US was particularly pleasing.”

Katrin Wehle, Managing Director, SSA DCM, Deutsche Bank.

"A great outcome for the IDB during an ultimately heavy issuance window and choppy rate backdrop. Pricing at MS+5bps, this is IDB's tightest print this year. The success of this transaction amidst several outings from peers is further evidence of IDB's strong foothold amongst the global investor base, and the continued support for their mandate. Morgan Stanley is very proud to have been involved and help move IDB closer towards completing their 2020 funding programme."

Ben Adubi, Head of SSA Syndicate, Morgan Stanley.

“Wells Fargo Securities is delighted to have worked with IDB on this new long 3-year USD global. The transaction achieved the tightest spread vs treasury of any SSA 3-year transaction since the start of the pandemic. Furthermore, the size and high-quality book allowed for a 2.5 billion deal size, an increase from the minimum $2 billion envisaged. Congratulations to the IDB team on this transaction.”

Carlos Perezgrovas, Head SSA Origination, Wells Fargo.