AfDB launches $463.9m Kangaroo social bond

The African Development Bank said it has initiated a $463.9m (600 million Australian dollar) five-year-five-month Kangaroo bond, to mark its return to the Australian dollar bond market.

The AfDB disclosed this in a statement on Monday, noting that the bond is subject to the securities regulations of Australia.

The Kangaroo bond, also known as a Matilda bond, is a foreign bond issued in the Australian market by non-Australian firms and denominated in the country’s currency.

According to the AfDB Treasurer, Hassatou N’sele, the transaction, announced on June 8, was led by Nomura and RBC Capital Markets.

The bond is the bank’s first benchmark Kangaroo since early 2018, its first in the mid-curve since 2015 and its largest Australian dollar trade ever issued, N’sele said.

She noted that the COVID-19 pandemic had led to a rise in global issuances of social bonds.

“Following the groundbreaking $3.1bn three-year ‘Fight COVID-19’ Social Bond we issued in 2020, we’re glad to see that public domestic markets, like the Kangaroo bond market, are now seeing similar development.

“This is in terms of interest from dedicated ESG investors, which provided additional momentum enabling us to print the largest trade we’ve ever done in AUD,” the AfDB Treasurer said.

The AfDB Manager of Capital Markets and Financial Operations, Keith Werner, disclosed  that 38 per cent of investors in the deal had a socially responsible investment approach.

According to Werner, the AfDB intends to issue more social bonds in Australian dollars.

“In addition to the important contribution that socially responsible investors had to the success of this trade, it’s also gratifying to see such a large portion of the investors (41 per cent) were domestic.

“We look forward to leveraging this momentum and continue evaluating opportunities in the future in this market,” Werner said.

He said more than 30 investors participated in the deal, with a total order book of more than $775m (Australian dollar), which included a strong cohort of Australian investors, while fund managers were the major investor type.

The AfDB had in December 2016 launched its inaugural Kangaroo Green Bond.

Ehime Alex
Ehime Alex
Ehime Alex reports the Capital Market, Energy, and ICT. He is a skilled webmaster and digital media enthusiast.

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