(Ecofin Agency) - This bond issuance strengthens the bank's ability to act, enabling it to expand its impact in low-income African countries, while maintaining a cautious risk profile.

The Arab Bank for Economic Development in Africa (BADEA) successfully raised €750 million ($812.3 million) through an international bond issuance, set to mature in March 2028, with a fixed coupon rate of 3%. The bonds were issued at 99.653% of their nominal value, offering a yield of 3.123%.

This operation was supported by an international banking syndicate, which included Afreximbank, Citigroup, Deutsche Bank, Emirates NBD, JP Morgan, Société Générale, and Standard Chartered. Investor demand was strong, driven by interest in high-rated supranational issuers (BADEA holds an AA- rating with a stable outlook from S&P), particularly as African sovereign issuances remain under pressure.

The bond issuance came at a time when rating agencies were reaffirming the issuer’s financial stability. In September 2024, S&P Global Ratings reaffirmed BADEA’s AA rating with a positive outlook, praising the institution’s asset quality, financial governance, and liquidity. Meanwhile, Moody’s upgraded its rating to Aa1 in May 2024, and in November, Japan Credit Rating Agency (JCR) assigned BADEA a stable AAA rating.

This funding raise is strategically timed, following the BADEA board’s approval in December 2024 of a five-year plan (2025-2029) worth $18.375 billion, a 120% increase over the previous strategic cycle. The plan aims to boost financing in key sectors such as infrastructure, agriculture, SME development, and regional trade integration.

BADEA’s ambitions are aligned with the Arab Coordination Group, which announced a collective $50 billion commitment in 2024 to support Africa’s economic transformation. By strengthening its capital base in the bond markets, BADEA aims to solidify its role as a financial bridge between the Arab world and sub-Saharan Africa. Earlier in January 2024, BADEA had already raised €500 million in its first-ever senior, non-guaranteed social bonds.