The West African Development Bank (BOAD) has successfully raised $500 million through the issuance of a sustainable hybrid bond in the international capital market, marking a significant milestone in its financial strategy. The deeply subordinated instrument, with a 30-year maturity and a five-year non-call period, carries an equivalent euro coupon rate of 5.9%.
Investor confidence in BOAD’s creditworthiness was evident as the bond attracted a $1.9 billion order book within a single day, resulting in an oversubscription ratio of 3.4 times and a price tightening of 37.5 basis points from its initial offer.
This latest transaction follows BOAD’s earlier private placements, which secured $204 million from the Arab Bank for Economic Development in Africa (BADEA) and Cassa Depositi e Prestiti (CDP) in December 2023 and August 2024, respectively. With a Baa3 rating from Moody’s and recognition of 50% equity content by both Moody’s and Fitch, this public issuance propels BOAD closer to its Djoliba Strategic Plan goals, achieving 95% of its capital increase target. The transaction also raises BOAD’s equity-to-assets ratio to 41.7%, strengthening its financial stability.
The bond issuance attracted a diverse pool of investors, with the UK accounting for 44% of the allocation, followed by Switzerland (20%), the U.S. (13%), the Middle East (3%), Asia (2%), and the rest of Europe (19%). Asset managers dominated participation with 69% of the allocation, while hedge funds accounted for 20%, banks/private banks 6%, and pension funds/insurance firms 5%.
The proceeds from this transaction will be directed toward financing or refinancing eligible green and social projects under BOAD’s Sustainability Bond Framework. This aligns with the bank’s commitment to climate action and social development across the West African Economic and Monetary Union (WAEMU) region.
Commenting on the achievement, Mr. Serge Ekué, President & Chairman of BOAD’s Board, stated:
“This groundbreaking transaction is a testament to investor confidence and underscores BOAD’s commitment to innovation as a key driver of development. By mobilizing additional funds, we are strengthening our capacity to finance impactful projects across our member countries, fostering sustainable growth and economic resilience. My sincere gratitude to our advisors Rothschild & Co and Galite, as well as to BNP Paribas, Société Générale, HSBC, JP Morgan, and SMBC.”
This issuance reinforces BOAD’s role as a leading financial institution in West Africa, ensuring continued investment in sustainable infrastructure and economic development initiatives across the region.
