Trade and Development Bank issues new 7-year $500mn unsecured bond offering

The Trade and Development Bank has made a significant move by issuing a new seven-year, $500 million unsecured bond, marking its return to the capital markets. In a recent interview on CNBC Africa, the Managing Director and CEO of TDB, Admassu Tadese, shed light on the impact of COVID-19 on the banking sector and the reasons behind the successful bond offering. Tadese highlighted that the pandemic had affected the bank's growth initially, leading to a decline in demand due to lockdowns and economic challenges. However, with the economy showing signs of recovery, TDB anticipates an increase in demand for financing for trade and development projects in Africa in 2021, with growth forecasted at 3.4%. The issuance of the new bond comes at a time when the global economy is transitioning towards normalization, fostering investor appetite for emerging and frontier markets. Tadese expressed satisfaction with the robust investor response to the bond offering, with the issue being oversubscribed by 4.5 times. The pricing and tenor of the bond were also highlighted as the best the bank has ever achieved, showcasing strong investor confidence in TDB's performance and resilience throughout the COVID-19 pandemic. TDB's strategic roadshow for the bond saw a diverse range of investors, predominantly from Asia and the United States, reflecting a global interest in TDB's offerings. Tadese emphasized the importance of building trust and confidence with investors, underpinned by a solid track record and strategic partnerships worldwide. The bank has been actively involved in issuing local currency bonds in various African jurisdictions, including Kenya, Uganda, Tanzania, and with plans for a future issuance in Rwanda. Discussions are also underway for a potential local currency bond issue in South Africa, as part of TDB's commitment to developing African capital markets. Looking ahead, Tadese hinted at a possible local currency bond issue within the next six months, pending regulatory approval in a specific African country. The bank aims to utilize the proceeds from these bond offerings to stimulate growth and development across the continent, fostering a sustainable financial ecosystem for trade and infrastructure projects in Africa.