The African Development Bank (AfDB) raised $3 billion in a three-year bond to help lift the economic and social impact that the COVID-19( Coronavirus) pandemic will have on Africa’s economies and people’s livelihood.
In a statement, the AFDB noted that the ‘Fight COVID-19’ Social bond has a three-year maturity and will amass interest from bank treasuries, central banks and official institutions and asset managers and investors who are socially responsible with bids exceeding $4.6 billion.
At 53 per cent, Fight COVID-19 social bond was allocated to central banks and official institutions and asset managers at 20 per cent bank treasuries at 27 per cent while in the Final bond distribution statistics Africa got 8 per cent.
The social bond that will pay an interest rate of 0.75% is the largest dollar-dominated bond ever launched in international capital markets to date as well as the largest US dollar bench bank the bank has ever issued.
The bank is providing flexible responses which will lessen severe economic and social effects of the COVID-19 pandemic on its regional member countries and private sectors in Africa.
“These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion COVID-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest dollar social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr Akinwumi Adesina, President African Development Bank Group.
It is estimated that the African continent will require billions of dollars to cushion the impact of the pandemic as many countries take contingency measures.
“We are thankful for the exceptional level of interest the Fight COVID-19 Social Bond has raised across the world, as the African Development Bank moves towards lessening the social and economic impact of the pandemic on a continent already severely constrained. Our Social bond program enables us to highlight our strong development mandate to the investor community, allowing them to play a part in improving the lives of the people of Africa. This was an exceptional outcome for an exceptional cause,” said Hassatou Diop N’Sele, African Development Bank Treasurer.