On 14 June 2022, the African Development Bank (www.AfDB.org) launched a 19-billion Ugandan shilling (UGX) ($5.07 million) 2-year theme bond, the first-ever African frontier currency-denominated ESG issuance by a multilateral development institution.
The bond, which is due in June 2024, will be settled in dollars and will have a fixed coupon of 10.5 percent. It was issued in 2022 as part of the African Development Bank Group’s ‘Feed Africa’ (https://bit.ly/3HZgao5) strategic High 5 and is the bank’s first offshore UGX bond issuance. The transaction was arranged by Standard Chartered Bank through the bank’s Global Debt Issuance Facility. The investor was Capitulum Asset Management.
In accordance with its lending policies, the Bank will direct funds equal to the net proceeds of the issue to lending projects that advance the ‘Feed Africa’ strategic priority.
Keith Werner, African Development Bank Division Manager for Capital Markets and Financial Operations, said: “The African Development Bank is very pleased to collaborate with Standard Chartered Bank and Capitulum Asset Management to launch this inaugural African frontier currency ESG transaction, contributing to our High-5 development priorities while extending our investor reach in Europe.”
Under its Feed Africa strategy, the Bank is working to (i) contribute to reduce poverty; (ii) end hunger and malnutrition; (iii) make Africa a net food exporter; and (iv) move Africa to the top of export-orientated value chains where it has a comparative advantage. Feed Africa’s overall goal is to make Africa a net food exporter by 2025.
Theodor Kirschner, Fund Manager at Capitulum Asset Management said: “Our participation in the African Development Bank’s Ugandan shilling bond funding the ‘Feed Africa’ program helps us to reach our goal to invest with a positive impact while providing an adequate yield in a frontier currency.”
Dain Sherborne, head of EM SSA Bond Trading and Annemarie Ganatra, head of MTNs at Standard Chartered Bank, said: “We are delighted that our core strengths in African markets have enabled us to arrange this ‘Feed Africa’ theme bond issuance for AfDB. We look forward to continuing to strengthen our partnership with multilateral development banks to help them achieve their common goals.”
About the African Development Bank Group:
The African Development Bank Group (AfDB) is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 41 African countries with an external office in Japan, the AfDB contributes to the economic development and the social progress of its 54 regional member states. For more information: www.AfDB.org