News

IDB launches new 7-year fixed rate global bond

Washington, D.C. – The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new $1.5 billion 7-year fixed rate global benchmark.

The transaction pays a semi-annual coupon of 0.625% and matures on September 16, 2027. It was priced with a spread of 17.55 basis points over the 0.500% UST due August 31, 2027, which translates to a semi-annual yield of 0.651%.

The transaction represents IDB’s first 7-year benchmark in over a year and marks IDB’s sixth foray into the US Dollar capital markets in the fixed rate Benchmark format in 2020 following its most recent $2.5 billion 3-year benchmark in August.

“As the 7-year maturity is not typical, we were targeting a $1 billion transaction. We were pleased to have the market’s strong support in our longest tenor USD benchmark issuance to date. This allowed us to print a larger than expected $1.5 billion, making it the largest 7-year deal from a supranational this year. The deal is our sixth USD global benchmark this year, having already issued multiple times in the 3- and 5-year maturities”, said Laura Fan, Head of Funding at the IDB.
 

Investor Distribution:

Geographic Region

Investor Type

Asia & Pacific

40%

 

Central Banks / Official Institutions

45%

Americas

32%

 

Banks

37%

EMEA

28%

 

Asset Managers

17%

 

 

 

Pension Funds / Insurance / Corp

1%

 

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
  • For investor information about IDB’s bonds, please visit: http://www.iadb.org/investors

 

Bond Summary Terms:

Issuer:

Inter-American Development Bank (Ticker: IADB)

Issuer rating:

Aaa / AAA (Moody’s / S&P)

Amount:

USD 1.5 billion

Settlement date:

16 September 2020 (T+5)

Coupon:

Coupon payment dates:

0.625%

16 March and 16 September

Maturity date:

16 September 2027

Issue price:

99.822%

Issue yield:

0.651% s.a.

Reoffer spread (bps):

Mid Swaps +16 / CT7 +17.55

Listing:

London Stock Exchange

Clearing systems:

Fedwire, Euroclear, Clearstream

Joint lead managers:

BofA / HSBC / RBC Capital Markets

ISIN / CUSIP:

US4581X0DQ82 / 4581X0DQ8

 

Joint Lead Manager Quotes:

“A great outing by the IDB in a maturity often viewed as the most challenging in the USD SSA market. Importantly, investor interest was extremely diversified across not only asset classes but also geographical jurisdictions. Most impressively, the new issue priced with no new issue concession,” said Adrien de Naurois, SSA Syndicate, Bank of America. 

“IDB achieved a highly-successful outcome with its USD 7-year transaction, marking the first high-grade SSA issuance in the tenor since June. The resilient support from high-quality bank treasuries and central banks, which enabled a 1bp tightening in pricing, is testament to IDB’s global recognition in the capital markets,” said Asif Sherani, Managing Director, Head of SSA Syndicate, HSBC.

“IDB's very successful 7-year benchmark reflects a very proactive strategy of market segmentation that has catered to a broad range of investors by adding liquidity to multiple points on the yield curve,” said Jigme Shingsar, Managing Director, RBC Capital Markets.

About the IDB

The Inter-American Development Bank is a multilateral financial institution supporting Latin America and the Caribbean’s efforts to reduce poverty and inequality, and to bring about development in a sustainable, climate-friendly way. Established in 1959, it is the leading source of development financing for Latin America and the Caribbean, with a strong commitment to achieving measurable results.

*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.

Press contact
More Information

Laura Fan
Head of Funding
lauraf@iadb.org
(202) 623 - 3772

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