AFD successfully issued a new 2 billion euros sustainable bond maturing on january 20th, 2035

This new transaction is the second syndicated transaction of the year for AFD after its 1 billion dollars 5-year issuance also in sustainable format, executed on January 9th, 2025. 

Thibaut Makarovsky, Head of Financing and Market Operations at AFD: “After our USD 5y last week, we took advantage of the Monday window to issue in EUR on a 10-year maturity. In a still busy, volatile and uncertain market, we are very satisfied with the result, as the support of quality investors enabled us to tighten our guidance by 3bps and also maximize the size. This is also our second sustainable bond issued this year. We will be announcing our 2025 program at the end of January.”

Transaction highlights:

The EUR 2 billion transaction offers a final spread of 21 bps over the OAT curve, equating to an annual re-offer yield of 3.674% and a re-offer price of 99.596%, with a coupon of 3.625%.

Execution and allocations:

The announcement of the transaction on the market Friday morning was followed by investor calls. 

The orderbook opened on Monday 13th January around 9:15 am CET with Guidance released at OAT+24bps area. The book increased rapidly, reaching EUR 4.9bn (including JLM interest) around 11:10 am CET, allowing AFD to announce a final spread of OAT+21bps area (3bps inside the Guidance). Demand continued to grow following this tightening, with the orderbook exceeding EUR6.7bn. Benefitting from significant high-quality demand, AFD was able to set the size at EUR 2bn. The transaction was priced at around 3:00pm CET, with a coupon of 3.625% and a final yield of 3.674% which translated in a re-offer price of 99.596%.

The quality of the order book is reflected in the typology of investors allocated: asset managers were allocated 40% of the final size, insurances and pension funds 29%, banks 18%, central banks & official institutions 9% and finally 4% were allocated to other investors. In terms of geographies, France accounts amounted to 38% of allocations, followed by UK investors with 16%, Germany/ Austria with 17%, Southern Europe with 13%, Asia with 8%, Nordics with 5%, 2% and 1% to Benelux and Americas respectively.

 

Transaction details:

• Issuer: Agence française de développement
• Ratings: AA- (S&P, stable) / AA- (Fitch, negative)
• Transaction Size: EUR€ 2 billion
• Issuing Date: January 13th, 2025
• Settlement Date: January 20th, 2025
• Maturity Date: January 20th, 2035
• Re-offer Price: 99.596%
• Coupon: 3.625% , annual Act/Act ICMA
• Annual Re-offer Yield: 3.674%
• Final Spread: 21 basis points
• Listing: Euronext Paris
• Joint Lead Managers: Barclays, Citi, CACIB, JP Morgan, Natixis

Being a Sustainable issuance, the proceeds of the bond will be used to finance/refinance a portfolio of loans that meet the criteria defined in the group’s SDG bond issuance framework.