The Asian Infrastructure Investment Bank (AIIB) has announced exceptional results in its latest three-year Sustainable Development bond issue, worth US$2 billion. This success marks the closing of the AIIB financing program for the year 2023.
Domenico Nardelli, treasurer of the AIIB, expressed his satisfaction with the continued support of a growing number of investors and the bank’s constant presence in the capital markets.
Nardelli noted: “As we approach our $10 billion funding goal, we can reflect on where we started the year and where we have come.”
He highlighted that the AIIB sought to strengthen its position as an issuer in 2023, with goals that included opening new markets and improving spreads compared to similar issuers.
The bank met these objectives by issuing its inaugural operations in EUR and CHF and getting closer to the levels of its peers with each of its issuances.
This issuance represents the AIIB’s second USD benchmark bond this year and reinforces its commitment to maintaining a liquid USD curve while constructively leveraging the USD funding market.
The deal attracted interest from more than 110 investors, generating total orders of more than $4.8 billion, record figures for the AIIB.
AIIB participates in sustainable bond issuance worth USD 100 million
The three-year bond has a coupon of 4.875% per year, payable semiannually, and was set with a spread against mid-swaps of +41 basis points, equivalent to a spread of 22.8 basis points over US Treasury bonds. expiring on August 15, 2026.
The issue attracted broad subscription globally, with 41% of investors coming from Asia, 37% from Europe, the Middle East and Africa (EMEA) and 22% from the Americas. The majority of issuance was allocated to central banks and official institutions, which represented 73%, followed by banks with 16% and fund managers with 11%.
Darren Stipe, Head of Finance at the AIIB, celebrated the success of this last issue of the year, highlighting that it was the largest in terms of order book and the largest number of investors, including many new ones. Stipe anticipated a promising 2024 and the intention to build on the success achieved in 2023.
BMO Capital Markets, BofA Securities, Citi and Nomura acted as joint lead managers on the transaction.