News

IDB launches US$2.1 billion 2.250% 10-year Fixed Rate Global

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P),priced a new US$2.1 billion 10-year global bond.

The transaction pays a semi-annual coupon of 2.250% and matures on 18 June 2029. Priced with a spread of 12.25 basis points over the UST 2.375% May-29, this represents a yield of 2.270%.

This is the IDB’s second public USD benchmark transaction of 2019, following their 5-year US$3.25 billion benchmark in January, and more notably the first 10-year USD benchmark in the SSA space since IDB’s US$2.8 billion 10yr benchmark in September 2018. With the addition of today’s new 10-year benchmark, IDB has completed US$10.8 billion of an estimated US$20.5 billion funding program for 2019.

Also, the transaction complements IDB’s existing maturity profile and injects new liquidity in the long end of the curve, extending it further past the September-28 Global bond (issued in 2018).

The transaction was well oversubscribed, with books in excess of US$2.7 billion and with just under 70 accounts participating from across a broad geography and well-diversified investor base. The strength of the orderbook was underscored by the high participation of bank treasuries who took 44% of the total allocations, followed by Central Bank / Official Money investors, whom accounted for 39% of the final allocation.

“Amid a challenging market environment, the IDB is pleased to reopen the 10-year supranational US dollar market. Given the lack of supply in this part of the curve as well as a slight backup in rates, we pinpointed a good issuance window. Given the strong, broad based demand, we sized the bond at US$2.1 billion to facilitate the allocation process. We are very pleased with the outcome,” said Laura Fan, Head of Funding of the IDB.

Investor Distribution:

By Geography

By Investor Type

Asia

45%

Banks / Private Banks

44%

EMEA

36%

Central Banks / Official Institutions

39%

Americas

19%

Asset Managers

14%

 

 

Pension Funds / Insurance / Corporates

  3%

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 IADB website: 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 2.1 billion

Settlement date:

18 June 2019 (T+5)

Coupon:

2.250%

Coupon payment dates:

18 December and 18 June (semi-annual)

Maturity date:

18 June 2029

Issue price:

99.822%

Issue yield:

2.270% s.a.

Reoffer spread:

Mid-Swaps+15bps / CT10+12.25

Listing:

London Stock Exchange

Clearing systems:

Fedwire, Euroclear, Clearstream

Joint lead managers:

Citi, GSI, TD

CUSIP:

4581X0 DG0

Joint Lead Manager Quotes:

"IDB have again led the way in reopening the 10yr part of the curve for the supranational community. Impeccable timing saw a strong investor response and ultimately allowed for a 1bp tightening and a $2.1bn final size. Citi was delighted to be involved in this fabulous transaction."
Alex Barnes, Head of SSA Syndicate, Citi. 

"A strong return to the 10yr tenor for IDB, an issuer which continues to demonstrate their unrivaled franchise in the long end of the US$ curve. Having successfully printed a 10yr in September last year, the IADB has returned in remarkable fashion to re-open the long-end market. This deal demonstrates their peerless capacity for placing longer dated paper despite the unprecedented rally in the Treasury market in between the two transactions."
Maud Le Moine, Executive Director, Goldman Sachs International

“A well-timed 10-year USD benchmark from the IDB. This transaction offered investors a rare AAA-rated asset in the long-end of the curve and enabled the issuer to capture price tension from the USD SSA market. The diversified order book reflects IDB’s broad investor appeal and maintains their excellent issuance record in this tenor. Congratulations to the IDB team.”
Laura O’Connor, Director, TD Securities

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. The IDB is the leading source of multilateral financing for Latin America and the Caribbean.

Press contact
More Information

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