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IDB Launches C$750 Million 5-year Sustainable Development Bond Re-Opening

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a C$750 million re-opening of the March 2029 CAD Sustainable Development Bond (“SDB”), bringing the total outstanding on the bond to C$1.25 billion.

The transaction pays a semi-annual coupon of 4.600% and matures on  March 1st, 2029. It was priced at +41 basis points to CORRA mid-swaps, which equates to +34 basis points over the 3.250% CAN due September 2028 and carries a semi-annual yield of 3.662%.

The transaction marks IDB’s first SDB CAD benchmark issuance in 2024 and further builds on a robust presence in the Canadian dollar maple market.

The success of the transaction was underpinned by IDB’s high credit quality and garnered strong support from the global investor community. Not only was the orderbook well supported by Central Banks and Official Institutions, but IDB benefited from the support of a broad group of Banks and Bank Treasuries which helped expand its reach within the domestic CAD market.

The proceeds of the bond will finance eligible projects under IDB’s Sustainable Development Bond Framework, including social inclusion and equity, productivity and innovation, economic integration, climate change and environmental sustainability, gender equality and diversity, and institutional capacity and rule of law.

The trade attracted orders over C$950 million, generating strong interest from a broad range of investors from around the world, including central banks, official institutions, bank treasuries and asset managers.

“Our first outing in the CAD market this year surpassed expectations.” said Laura Fan, head of funding at the IDB. “Favorable market conditions coupled with attractive spread dynamics generated a robust order book that enabled us to print a larger than expected trade. The line now stands as our largest CAD bond, aligning with our strategy of developing large, liquid issuances in the CAD market.” 

Investor Distribution:

Geographic RegionInvestor Type 
Americas37%Central Banks / Official Institutions47%
EMEA34%Banks42%
Asia29%Pension Funds / Insurance / Corp8%
  Asset Managers3%

 

Bond Summary Terms:

Issuer:Inter-American Development Bank (Ticker: IADB)
Issuer rating:Aaa / AAA (Moody’s / S&P)
Amount:CAD 750 million
Settlement date:23 January 2024 (T+10)
Coupon:4.600%
Coupon payment dates:March 1st and September 1st (semi-annually), interest accruing from October 12th, 2023
Maturity date:March 1st,  2029
Issue price:104.330%
Issue yield:3.662% s.a.
Reoffer spread (bps):CORRA MS + 41bps / CAN 3.250% September 2028 + 34 bps
Listing:London Stock Exchange
Clearing systems:Fedwire, Euroclear, Clearstream
Joint lead managers:BMO Capital Markets, CIBC Capital Markets, RBC Caital Markets, TD Securities (B&D)
ISIN:CA458182EL29

 

Joint Lead Manager Quotes: 

"The IDB strategically turned to the Canadian dollar market to re-open its long 5-year Sustainable Development Bond against a constructive demand backdrop that applauded the increase in liquidity by means of a tap. The transaction was met with strong demand from investors globally, including some of the key domestic investors, a testament to IDB’s footprint in Canada. BMO is honored to have been selected as a trusted partner in IDB’s successful return to this market." Sean Hayes, Managing Director and Head of US Syndicate, BMO Capital Markets.

“Congratulations to the IDB team on the successful re-opening of its 5-year Maple Benchmark, now its largest CAD-denominated outstanding since 2003. IDB’s early calendar year issuance substantiates its commitment as a frequent issuer in the CAD market. Moreover, the use of its Sustainable Development Bond label underscores IDB’s commitment to advancing the Sustainable Finance principles.” Priya Radha, Managing Director & Global Head, Government Solutions, CIBC Capital Markets. 

“Congratulations to the Inter-American Development Bank’s stellar opening trade in the Canadian market in 2024. The transaction was very well supported by both a diverse group of investor jurisdictions and types, which highlights IDB as a leader in the Canadian market and the group’s ongoing ability to issue across all markets. It has been RBC’s pleasure to continue our partnership with the IDB group in the Canadian market.” Jigme Shingsar, Managing Director, US SSA Debt Capital Markets, RBC Capital Markets. 

"‎We congratulate IDB on an impressive CAD-denominated transaction, increasing the size of their March-2029 benchmark to C$1.25 billion - continuing to show their leadership in the currency. IDB's ability to access multiple different currencies in a benchmark format over the course of one week is a testament to their name and global investor following." Laura O'Connor, Managing Director, Fixed Income Origination & Syndication, TD Securities.
 

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

*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.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public- and private-sector clients throughout the region. Take our virtual tour.

Contacts

Mena Duran,Melissa

Mena Duran,Melissa
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