Skandia and Länsförsäkringar Anchor AfDB’s COVID19 Bond

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    Stockholm (NordSIP) – On April 3rd, the African Development Bank (AfDB) issued SEK2.5 billion in 3-year Social Bonds aimed at contributing to the global struggle to contain COVID19. This Swedish krona bond is the latest in the AfDB’s wider series of  “Fight COVID-19” Social Bonds, which were launched on March 27th with the issuance of its inaugural US$3 billion “Fight COVID-19” Social Bond.

    “Our inaugural SEK Fight Covid/10 Social Bond highlights Swedish investors’ goodwill and support at this critical time for the work and the African continent in particular, as we join forces to address the unprecedented impact of Coronavirus,” said Hassatou N’Sele, Treasurer of the AfDB.

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    The borrowing was divided into two transactions based on the same security. First a total of SEK2 billion was issued followed by a tap of SEK500 million later in the date as due to additional interest. The bonds pay a 0.2425% coupon and were priced at 14 basis points over mid-swaps. The SEK2 billion bond was priced at par, while the final SEK500 million were priced at a 99.981 discount to yield 0.249% on account of a change in the underlying rates.

    “The AfDB is a true Social Bond champion,” added Lars Mac Key, Head of DCM Sustainable Bonds at Danske Bank. “Their Social bonds have provided financing for many good purposes over the years, results that one can follow in their explanatory impact reporting. The AfDB is truly there for Africa, providing significant rapid support for its countries dealing with the serious consequences caused by the pandemic. It’s fantastic to see how Swedish investors back these efforts by supporting this Swedish krona denominated social bond. Danske Bank is proud to have supported the AfDB on this important transaction.”

    The “Fight COVID19 Social Bond” will go to projects that will enhance access to essential health and healthcare services, strengthen health systems, provide improved access to water and sanitation as well as maintaining jobs. According to the AfDB, the transaction appealed to “some of the main sustainable investors in the Swedish krona market, including anchor investors Skandia and Länsförsäkringar Liv.”

    “Through this Covid-19 social bond issued by the AfDB, we provide support and financing to African countries and businesses in the fight against this pandemic,” said Jakob Carlsson, CEO of Länsförsäkringar Liv. “It is a global challenge and crisis that needs to be tackled on all continents. We value in particular the AfDB’s strong contributions and focus on measurable social development outcomes in this issuance, and its alignment with UN Sustainable Development Goal number 3 ‘good health and well-being’.”

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