Three-year benchmark attracts strong global demand as Bank secures largest-ever GBP deal
The African Development Bank (AfDB) has successfully raised £1 billion through a three-year GBP Global Benchmark bond, marking its return to the sterling debt market and setting a new issuance record for the institution.
The bond, which matures in January 2029, was priced amid favourable market conditions and drew strong interest from global investors, according to a statement released by the Bank on Wednesday.
The transaction represents AfDB’s largest-ever sterling bond issuance, underscoring renewed investor confidence in the Bank’s credit strength and funding strategy.
AfDB said the bond was launched with an initial price guidance of SONIA Mid-Swaps plus 35 basis points, but demand quickly exceeded expectations. Order books grew beyond £1.5 billion within hours, including interest from Joint Lead Managers.
“Investor demand was strong from the outset, with high-quality orders surpassing £1.5 billion by 10:30am UK time,” the Bank said.
The bond carries a fixed annual coupon of 3.750 per cent, with an annual yield of 3.835 per cent. It was re-offered at a spread of 15.2 basis points above the UK Treasury 0.5 per cent January 2029 benchmark, reflecting solid pricing outcomes.
Strong institutional participation
Allocation data from the transaction showed heavy participation by institutional investors. Bank treasuries accounted for 66 per cent of total allocations, highlighting strong demand from financial institutions.
Central banks and official institutions took up 26 per cent of the issuance, demonstrating continued confidence from sovereign and policy-focused investors, while fund managers and other investors made up the remaining 8 per cent, adding depth to the investor base.
The bond was issued in global format (SEC-exempt), with settlement scheduled for January 14, 2026, and a maturity date of January 14, 2029.
Why it matters
The successful £1 billion transaction highlights AfDB’s ability to tap deep liquidity in the sterling market at a time of favourable funding conditions.
Market analysts say the deal reinforces global investor confidence in the Bank’s financial resilience and prudent funding approach, while expanding its access to diversified sources of capital.
For AfDB, the issuance enhances funding flexibility, strengthens its sterling yield curve, and supports its mandate to finance development projects across Africa at competitive rates.
Background
The African Development Bank is one of the continent’s leading multilateral development finance institutions, with a strong track record in international capital markets.
The Bank currently holds top-tier credit ratings of Aaa/AAA/AAA, all with stable outlooks. In June 2025, Fitch Ratings reaffirmed AfDB’s AAA Long-Term Issuer Default Rating, citing its strong capitalisation and risk management framework.
The latest transaction extends AfDB’s presence in the GBP market and marks its largest-ever bond issuance in sterling.
In 2023, the Bank raised $2 billion through a five-year Global Benchmark bond due March 2028, which attracted over $3.5 billion in orders from 95 investors, including central banks and official institutions.
