AFD Issues Bond of 500 Million British Pounds Maturing in March 2026

Key aspects of the transaction:

AFD kicked-started the execution of its 2023 funding programme with this first syndicated benchmark issuance in GBP. This transaction marks a successful return to the sterling market for AFD since its last bond issuance in this market was priced in January 2022. The transaction demonstrates AFD's ability to promote its signature, to finance itself in multiple formats and to diversify its investor base.  

This 500 million British Pounds transaction offers a final spread of 105 basis points over the UK Treasury's benchmark curve, equivalent to an actuarial yield of 4.432% (s.a.) and a price of 99.706%.

The joint lead managers for this transaction are Deutsche Bank, HSBC, and Morgan Stanley.

Execution and distribution: 

The mandate for this new transaction and official book opening were announced at 9:37 (Paris) on Monday 9th January. The order book opened with an indicative spread of 105 basis points above the UK Treasury's reference Gilt UKT 0.125% 01/30/2026.

At 10:58 (Paris), the order book exceeded 270 million British pounds, allowing AFD to set the final spread for the transaction at 105 basis points above the UK Treasury's benchmark curve.

The order book continued to grow throughout the morning and finally exceeded 595 million British pounds. The final terms were announced at 13:13 (Paris) with the final amount of the issue fixed at 500 million British pounds. 

The new issue was priced at 15:00 (Paris) with an annual coupon of 4.375% and an actuarial yield of 4.432% (s.a.).

Central Banks & Official Institutions accounted for the majority of the distribution (63.6%), followed by Fund Managers (33.1%) and Banks (3.3%). Demand came mainly from European investors (38.7%), followed by Asia & Middle East (35.0%), and UK (26.3%)

“First French agency to issue in 2023, AFD has chosen the GBP market for its comeback, reinforcing our goal to be a recurrent actor in this market. We are delighted with the response and support from the investors, enabling AFD to optimize the size of the transaction to reach again the GBP 500m mark, as we did last year. Our goal remains to be present in the GBP market on a long-term basis as part of our refinancing program“, Thibaut Makarovsky, Head of Funding and Market Operations

Transaction summary:

• Issuer: Agence Française de Développement (AFD)
• Ratings: AA/AA (Stable/Negative) S&P/Fitch
• Size of the transaction: 500 million British pounds
• Settlement Date: 16 January 2023 (T+5)
• Maturity Date: 16 March 2026
• Reoffer Price: 99.706% 
• Coupon: 4.375%, annual, ACT/ACT ICMA
• Reoffer Yield: 4.432% s.a.
• Reoffer Spread: 105 basis points
• Denomination: GBP 200k + GBP 200k
• Listing: Euronext Paris, French law 
• Joint Lead Managers: Deutsche Bank, HSBC, Morgan Stanley

Allocation Breakdown:

Contact: _AFD_Funding@afd.fr

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