Following outings in the GBP and USD market in January, the Asian Infrastructure Investment Bank (AIIB) issued its debut benchmark EUR Sustainable Development Bond on Feb. 7, 2023. The 5-year EUR1.5 billion issue attracted strong interest from high-quality investors around the globe.
Given the increasing demand for lending activities in EUR, this market unlocks new opportunities for AIIB to better support its Members’ financing needs. As a fast-growing institution, AIIB has achieved total approved financing amount of over USD39 billion for 205 projects in 33 Members. As the youngest multilateral development bank, AIIB has set an ambitious target of ensuring that by 2025, 50% of approved financing will be directed toward climate finance. Reflecting AIIB’s commitment to sustainable development, proceeds from all AIIB bonds will be used to support AIIB’s mission of Financing Infrastructure for Tomorrow in accordance with the Bank’s operational and financial policies, which include policies addressing the environmental and social impacts of AIIB-financed projects.
“This issuance was a good opportunity to introduce AIIB to so many new accounts, with exceptional results,” said Darren Stipe, Head of AIIB’s Funding Team. “We had tangible success as our inaugural EUR benchmark attracted new investors, with over 50% of investors buying an AIIB issuance for the first time. This trade is something that had been on the horizon for many years and it's particularly rewarding to open our Euro program at this stage of AIIB's growth and on a such a positive note.”
According to AIIB Treasurer Domenico Nardelli, “I want to thank all the investors for their support of AIIB as we continue to establish our presence as a frequent borrower in capital markets. This successful benchmark transaction showcases AIIB’s commitment to build a diversified funding program over the years to come. We expect to continue expanding into new markets. I am very pleased to note that this transaction, so well received by investors, underscores once again the depth and liquidity of the Euro debt capital market.”
Key Transaction Terms:
|
Issuer |
Asian Infrastructure Investment Bank (AIIB) |
|
Issuer Rating |
Aaa / AAA / AAA (Moody’s / S&P / Fitch) |
|
Size |
EUR1.5 billion |
|
Announcement Date |
Feb. 6, 2023 |
|
Pricing Date |
Feb. 7, 2023 |
|
Settlement Date |
Feb. 14 2023 |
|
Maturity Date |
Feb. 14, 2028 |
|
Re-offer Spread |
Mid Swap +13bps |
|
Re-offer Price / Yield |
3.081% p.a. / 99.630% |
|
Joint Lead Managers |
Barclays, BNP Paribas, Deutsche Bank, J.P. Morgan |
Transaction Highlights:
- On Jan. 18, 2023, AIIB mandated the Joint Lead Managers to organize hybrid, in-person and virtual roadshows in Europe and announced that a EUR Sustainable Development Bond (SBD) transaction could follow, subject to market conditions.
- After successful feedback from investor meetings and taking advantage of a clean market window following a week of central bank meetings and other key economic events, AIIB decided to announce the mandate for a new EUR 5-year inaugural SDB on Monday, Feb. 6, 2023, with the objective to launch the next day.
- The following morning, the order book officially opened at 08:03 UKT with an initial guidance of MS+15bps area.
- At 09:11 UKT AIIB and the group released the first update, with the order book in excess of EUR 1bn (excl. JLM interest) and guidance unchanged at MS+15bps area.
- By 10:35 UKT, the book continued to grow with high quality investors dominating, which allowed the issuer to send an update with order books in excess of EUR 1.6bn (excl. JLM interest) and to set the spread at MS+13bps, 2bp tighter from initial guidance.
- The strong momentum was sustained, illustrating the robust demand from new investors for AIIB, and the transaction was launched at 12:20 UKT with a deal size of EUR1.5bn, 50% higher than the initial target, thanks to the quality of the final order book in excess of EUR2bn (incl. 150m JLM interest)
- The transaction was officially priced at 14:20 UKT offering a re-offer yield of 3.081% equating to a price of 99.630% and a re-offer spread of +76bps to the OBL 2.200% 04/2028.
Investor Distribution
|
By Geography |
|
By Investor Type |
|
|
Europe |
69% |
Central Bank / Official Institution |
52% |
|
Asia |
21% |
Banks |
28% |
|
Middle East & Africa |
10% |
Asset Manager |
20% |
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank whose mission is financing the Infrastructure for Tomorrow—infrastructure with sustainability at its core. We began operations in Beijing in January 2016 and have since grown to 106 approved members worldwide. We are capitalized at USD100 billion and Triple-A-rated by the major international credit rating agencies. Collaborating with partners, AIIB meets clients’ needs by unlocking new capital and investing in infrastructure that is green, technology-enabled and promotes regional connectivity.
