COVID-19: AfDB lists largest social bond on London Stock Exchange

The African Development Bank (AfDB) has launched and listed the largest social bond on the London Stock Exchange.  The bond, which is tagged “Fight COVID-19’’, is now available through its sustainable Bond Market.

The transaction, which is the first bond of the financial institution on the London Stock Exchange, was oversubscribed and attracted $4.6 billion of interest in the book.

The social bond, which raised an exceptional $3 billion, was launched to reduce the impact of COVID-19 on Africa’s economies and livelihoods.

With a 3-year maturity period, the bond attracted interest from various central banks and official institutions, bank treasuries and asset managers.

It also attracted Environment, Social and Governance (ESG) investors like Affirmative Investment Management (UK), Breckinridge, Columbia Threadneedle (USA), the Government Pension Investment Fund, and the International Fund for Agricultural Development, Pension Boards.

Others are United Church of Christ, PineBridge Investments, Praxis Impact Bond Fund, TIAA/Nuveen and the United Nations Development Program.

The International Development Secretary, Anne-Marie Trevelyan said, “The international community must work together to successfully tackle the coronavirus pandemic.

“The UK, along with partners like the African Development Bank and London Stock Exchange Group, is supporting the most vulnerable countries to invest in their own health systems and avoid economic hardship.

While we invest in areas like vaccine research to help end the pandemic sooner, this private investment through the AfDB, and our support for emergency lending through the IMF, will also help limit its impact on the global economy”.

The London Stock Exchange announced that admission fees would be waived for an initial period of 3 months for such social and sustainability bonds fund essential services such as healthcare, water and sanitation, supporting employment, or with a link to the relevant UN Sustainable Development Goals.

The CEO, London Stock Exchange, Nikhil Rathi, said: “We welcome the first bond from African Development Bank to list on our market and support them in their vital efforts to mitigate the impact of COVID-19 across Africa.

“This bond highlights the important role that social and sustainability bonds can play in directing funding to those countries, sectors and people across the world heavily impacted by this pandemic.”

The AfDB President, Akinwumi Adesina, said: “We are proud to announce that our first listing on the London Stock Exchange is a social bond. This is only the beginning of a stronger partnership between the African Development Bank and the London Stock Exchange. We will mobilize all we can on the capital market to fight the coronavirus in Africa.”

Swazi Tshabalala, Acting Senior Vice President, African Development Bank Group, also said: “The African Development Bank is at the forefront of helping African countries fight this pandemic with innovative financing solutions. We welcome this partnership with London Stock Exchange which will help us expand the horizon of investors that are interested and committed to Africa’s sustainable development.

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