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IDB returns to the Sterling Market with Second Sustainable Development Bond

The Inter-American Development Bank (“IDB” or “IADB”), rated Aaa/AAA (Moody’s/S&P), priced a new £500 million Fixed Rate Sustainable Development Bond.

The transaction pays an annual coupon of 2.125% and matures on 15th December 2028. It was priced with a spread of 51 basis points over the UKT October 2028 benchmark and carries a semi-annual yield of 2.223%.

The IDB last launched a new benchmark line in 2019 and this transaction is IDB’s second Sustainable Development Bond benchmark in the Sterling market. This trade showcased IDB’s resilience despite some volatility in broader rates markets, marking the first new GBP benchmark from a supranational in many weeks.

Responding to a clear window and more stable market conditions, the IDB drew strong demand from high quality global investors as well as core U.K. based accounts, highlighting continued support for AAA supranational credit. Orderbooks topped £690 million, enabling the IDB to launch a £500 million sized transaction.

“After a period of increased volatility and lack of issuances in long-end Sterling-denominated bonds, we found the perfect window for our return to the GBP primary markets in Sustainable Development Bond format and extend IDB’s curve. We are pleased with the strong reception and high-quality orders and for allowing ESG investors the opportunity to show continued support to our efforts in promoting sustainable development in the Latin American and Caribbean region.” Laura Fan, Head of Funding, IDB

Investor Distribution:

Geographic Region

Investor Type

UK

74%

 

Banks

53%

Europe

21%

 

AM/Insurance/Pension

47%

Asia

5%

 

 

 

 

Bond Summary Terms:

Issuer:

Inter-American Development Bank (Ticker: IADB)

Issuer rating:

Aaa / AAA (Moody’s / S&P)

Amount:

GBP 500 million

Settlement date:

29 April 2022 (T+6)

Coupon:

2.125%

Coupon payment dates:

15th December (annually)

Maturity date:

15th December 2028

Issue price:

99.332%

Issue yield:

2.223% s.a.

Reoffer spread (bps):

UKT 1.625% October 2028+51bps

Listing:

London Stock Exchange

Clearing systems:

Euroclear, Clearstream

Joint lead managers:

BofA Securities, Citi, Deutsche Bank and HSBC

ISIN:

XS2473753841

Joint Lead Manager Quotes:

“Congratulations to the IDB team on a highly successful return to the Sterling market. The trade tapped into specific investor interest in the 7-year part of the curve which has been undersupplied in 2022, generating a high-quality orderbook and enabling the issuer to upsize to £500m. BofA was delighted to be involved.” Kamini Sumra, Managing Director, SSA DCM Origination, BofA Securities.

“Citi was delighted to be part of IDB’s return to the Sterling benchmark market since October 2019. The transaction was a great success marking the first IADB Sterling benchmark transaction with a £500m size and the first supranational Sterling transaction since January 2022. The depth of the orderbook which closed just shy of £700m highlights the appetite for the IADB credit among the Sterling investor community. Many congratulation to the IDB Funding team!” Ebba Wexler, Managing Director, Public Sector Origination, Citi.

“A strong return to the sterling market for the IDB, extending its curve with a new Sustainable Development Bond. Responding to more favorable market conditions and attractive cost of funding, the IDB’s nimbleness and quick reaction was met with quality demand from the top accounts. The successful outcome of the new reference point highlights IDB’s strong fundamentals and its ongoing support not only from global investors, but equally the U.K. investor community. Deutsche Bank is proud to have been involved in this Sustainable Development Bond.” Katrin Wehle, Managing Director, SSA DCM Origination, Deutsche Bank.

"Congratulations to IDB on today's new 7-year £500m Sterling Sustainable Development Bond Benchmark - IDB's first new Sterling line since 2019 achieved broad investor participation and the largest SSA orderbook since Ukraine at £690m with almost 30 investors." Elena Farrell, Director, Public Sector DCM, HSBC.

 

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.

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

Additional Contacts

Fan,Laura Emily

Fan,Laura Emily
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