BOAD raised US$750 million in the international capital market
Lomé, 15 June 2016 – The West African Development Bank (“BOAD”) successfully issued on 28 April 2016 a debut US$750 million bond loan in the international capital market. Denominated in Euro, this amount corresponds to €661.8 million or XOF434.1 billion. Due for maturity in 5 years, the transaction carried a coupon of 5.50% per annum and a re-offer yield of 5.75%, which corresponds to a Euro-denominated rate of 3.83% following the foreign exchange swap deal concluded by BOAD as a hedge against foreign exchange risk.
The offering attracted strong demand, recording 180 subscriptions totaling US$1.8 billion. Selected orders were from USA (44%), Europe excluding UK (27%), UK (18%) Asia (9%), and the rest of the world (making up 2%). Per socio-professional category, fund and asset managers represented 70% of orders, followed by banks (11%), investment funds (10%), pension funds and insurance companies (6%) and other categories (3%).
BNP Paribas, Deutsche Bank, J.P. Morgan and Standard Bank acted as joint lead managers and joint bookrunners for the issuance. Fitch and Moody’s were tasked to rate the issuance; the notes were rated Baa1 (stable outlook) and BBB (stable outlook) by Moody’s and Fitch, respectively, and were consistent with the ratings assigned to BOAD in 2015 by both rating agencies.
First non-sovereign issuer in the regional capital market
Access to the international capital market is one of the key directions contained in the Bank’s 2015-2019 strategic plan. It enables the institution to diversify and better secure its sources of funding. Resources raised will strengthen BOAD’s operational capacity in serving the regional economy. So far, BOAD has been raising funds from the regional capital market. As a matter of fact, the institution issued its first bond loan in 1993 in this market. In the first quarter of 2016, it still floated a bond loan in an amount of XOF78.2 billion. Overall, it raised so far XOF991.05 billion, thereby becoming the first non-sovereign issuer in the regional capital market.
A credit rating confirmed
The success of the debut bond issuance reflects the creditworthiness of BOAD. The deal was carried out at the same time when rating agencies were reviewing the ratings assigned to BOAD in 2015. At the end of their reviews, they confirmed the “investment grade” credit ratings of BOAD. As such, on 19 May, Fitch confirmed BOAD’s “BBB” rating, representing the second best rating assigned by this agency to an African entity, behind African Development Bank (AfDB). For its part, Moody’s has, on 20 May, assigned again “Baa1” rating to BOAD, which corresponds to the fourth best rating in Africa, behind AfDB, Botswana and Africa Finance Corporation.
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