Coronavirus: AfDB launches $3 billion to alleviate virus' economic, social impact
Abidjan, Cote d'Ivoire (PANA) - The African Development Bank (AfDB) says it has raised "an exceptional" $3 billion in a three-year bond to help alleviate the economic and social impact the COVID-19 (coronavirus) pandemic will have on livelihoods and Africa’s economies.
The "Fight Covid-19" Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including Socially Responsible Investors, with bids exceeding $4.6 billion, AfDB said on its website on Sunday.
"This is the largest dollar denominated Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%," the Bank said.
The statement said AfDB Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.
“These are critical times for Africa as it addresses the challenges resulting from the coronavirus. The African Development Bank is taking bold measures to support African countries," said Dr. Akinwumi Adesina, President of the African Development Bank Group.
He said said this bond issuance is the first part of the Bank Group's comprehensive response that will soon be announced.
"This is indeed the largest dollar social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Adesina.
The order book for this record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.
“As the COVID-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure,” said Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.
Coronavirus cases were slow to arrive in Africa, but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems.
AfDB said it is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in desperate efforts to contain it.
Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession.
-0- PANA MA 29March2020
