CI-NEWS

AFDB launches COVID -19 social BOND.

2020-04-07

No: 480

AFDB launches COVID -19 social BOND.

The African Development Bank has launched a social bond to help counter the impact of the new Coronavirus pandemic. According to a communiqué issued by the bank, the continent requires billions of dollars to cushion the impact. “The Fight Covid-19 Social Bond, with a three-year maturity, reaped interest from central banks and official institutions, bank treasuries, and asset managers including socially responsible investors, with bids exceeding $4.6 billion. This is the largest dollar denominated Social Bond ever launched in international capital markets to date, and the largest US dollar benchmark ever issued by the Bank,” the communiqué stated.

Responding to the move, the President of the African Development Bank, Dr Akinwumi Adesina, said the continent was going through a life-threatening season. “These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The AFDB 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,” Dr. Akinwumi Adesina said. In the announcement, the bank indicated that the continent will need billions of dollars to overcome the impact of the disease as many countries rushed for contingency measures, including commercial lockdowns in desperate efforts to contain it. Globally, factories have been closed and workers sent home, “disrupting supply chains, trade, travel, and driving many economies toward recession.”

One stakeholder in the venture described it as truly remarkable. “In a time of unprecedented market volatility, the African Development Bank has been able to brave the capital markets in order to secure invaluable funding to help the efforts of the African continent’s fight against Covid-19. Not only that, but in the process delivering their largest ever USD benchmark. A truly remarkable outcome both in terms of its purpose, but also in terms of a USD financing”, observed George Sager, Executive Director, SSA Syndicate. The “exceptional interest” raised by the Fight Covid-19 Social Bond would be invested in lessening the social and economic impact of the pandemic in Africa, already severely affected by several crisis.

“Our Social Bond programme enables us to highlight our strong development mandate to the community, allowing our partners to play a part in improving the lives of the people of Africa,” said Hassatou Diop N’Sele, AFDB Treasurer.

The bond was allocated to central banks and official institutions, as well as asset managers. Distribution statistics indicated that Europe procured 37 per cent while America got 36 per cent. For its part, Asia procured 17 per cent while Africa got eight percent as the Middle-East acquired one per cent.

Culled from Cameroon Insider

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AFDB launches COVID -19 social BOND.