Supranationals - non-Europe

240 EuroWeek Financing supranationals and agencies

African Development BankRating Aaa, AAA, AAA

Donald Kaberuka President

Charles Boamah Acting vice president finance

Pierre Van Peteghem Treasurer

Hassatou N’Sele Head of funding

Key offiCialS

The African Development Bank (AfDB) provides loans and grants to African governments and private companies investing in the regional member countries in Africa. The bank is part of the African Development Bank Group, which also comprises the African Development Fund and the Nigeria Trust Fund. The group was established in 1964.

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Minimum size is ¥100m, a wide range of currencies and structures. However, AFDB generally cannot do certain structures like those that do not guarantee principal redemption or are credit-linked.

PriVate PlaCemeNt PoliCy

Source: African Development Bank

$ bn

0

2

4

6

8

10

12

2005

2006

2007

2008

2009

2010

20

11

fuNDiNg requiremeNt

Source: African Development Bank

$ bn

0 1 2 3 4 5 6 7 8

2005

2006

20

07

2008

2009

2010

groSS BoND iSSuaNCe

Data for USD global bonds. Source: African Development Bank

Central bank / official

institutions 68%

Asset & fund

manager 17%

Banks 15%

iNVeStor BaSe By tyPe (2010)

Data for USD global bonds. Source: African Development Bank

Americas 39%

EMEA 13%

Asia 48%

iNVeStor BaSe By regioN (2010)

Source: African Development Bank

ZAR 33%

USD 40%

NZD 6%

AUD 17%

BRL 3%

ZMK 1%

iSSuaNCe By CurreNCy (2010)

Source: AfDB

%

Syndicated 36 MTN / private

placement 3

Loan 1

Other 60

iSSuaNCe By tyPe (2010)

Data at end 2010. Source: AfDB

%

USD 53%

JPY 13%

ZAR 13%

CAD 8%

AUD 5%

CHF 2% TRY

2% NZD 2%

Other 2%

outStaNDiNg iSSuaNCe By CurreNCy

AFRICAN DEVELOPMENTBANK GROUP

FONDS AFRICAIN DE DÉVELO

PPEMENT

AFRI

CAN D

EVELOPMENT FUND

BANQUE

AFRICAINE

DE DÉVELOPPEMENT

risk weighting (Basel ii): 0%

riSK weigHtiNg

Supranationals - non-Europe

Financing supranationals and agencies EuroWeek 241

Source: African Development Bank

$ bn

0

5

10

15

20

25

30

2005 2006 2007 2008 2009

total aSSetS

Source: African Development Bank

$ bn

29

30

31

32

33

34

35

2005 2006 2007 2008 2009

total CaPital

Data at end 2010, unaudited. Source: African Development Bank

$ bn

One year or less and callable 3.25

More than one year but less

than two years 4.13

More than two years but less

than three years 3.58

More than three years but less than four

years 3.12

More than four years but less than five years

1.56 More thanfive years

3.2

outStaNDiNg iSSuaNCe By maturity

AfDB’s shareholders are all the 53 countries in Africa (with a 60% shareholding) and 24 other countries — including the G7 countries (with a 28% shareholding) — in the Americas, Europe and Asia. Turkey and Luxembourg are in the process of becoming shareholders.

owNerSHiP StruCture

rank lead manager amount $m No of issues

% Share

1Daiwa Capital Markets

770 4 33.78

2 Deutsche Bank 348 2 15.26

3 HSBC 344 10 15.11

4 JPMorgan 250 1 10.95

5 Mizuho 236 5 10.38

6 UBS 148 2 6.47

7 TD Securities Inc 98 1 4.31

8 Credit Suisse 30 1 1.32

9Standard Chartered Bank

30 2 1.31

10 Morgan Stanley 25 1 1.11

Subtotal 2,279 24 100

total 2,279 24 100

Source: Dealogic (March 16, 2010 to March 15, 2011)

toP BooKruNNerS

Pricing date February 24, 2011

Value ZAR1.86bn

maturity date March 3, 2016

Coupon 0.5%

Bookrunners Daiwa Capital Markets

Pricing date February 17, 2011

Value $1bn

maturity date March 15, 2016

Coupon 2.5%

Spread to benchmark 26.6bp over USTs

Bookrunners Daiwa Capital Markets, Deutsche Bank, HSBC, JPMorgan

Pricing date January 14, 2011

Value A$300m

maturity date January 25, 2016

Coupon 5.75%

Spread to benchmark 63.5bp over ACGBs

Bookrunners Deutsche Bank, UBS, TD Securities

Source: Dealogic

reCeNt DealS

Standard & Poor’s

AAA, stable outlook

Strengths•Strongliquidityandcapitalposition•Prudentfinancialmanagementandpolicies•Strongsupportfrommembers,including12AAA

rated countries, contributing SDR5.3bn in callable capital.

Weaknesses•Relativelyriskyloanportfoliowithnonperforming

loans larger than those of multilateral peers•TheinabilityofthegovernmentsofmostAfrican

countries to borrow from the bank

Theoutlookisstable.S&PexpectsAfDB’sliquidityto remain very strong and its high franchise value to increase, given the attention Africa is receiving from the international donor community. Further weakening ofcapitaladequacycouldbemitigatedwiththesubscription and payment of the recently approved capital increase by AfDB’s shareholders, which would demonstrate shareholder support. S&P’s view on shareholder support could change if shareholders do not subscribe to the capital increase, or do not pay in the expected amounts.

Key reCeNt ratiNg ageNCy CommeNtary

fitch

AAA, outlook stable

“The ratings of African Development Bank (AfDB) primarily reflect the support from its member countries, its strong capitalisation and its conservative risk management policies. AfDB’s capital is held 53 African countries — representing 60.2% of voting rights — and by 24 non-regional countries, most of which are highly rated OECD countries. Fitch believes member countries would provide additional support to AfDB if necessary. Support from member countries takes the form of callable capital, amounting to 89.2% of subscribed capital, that can be called in the event of the bank being unable to honour its debt obligations. To respond to the rapid increase in financing needs of African countries generated by the global crisis, the AfDB increased its lending massively in 2009 and 2010. The bank’s capitalisation, which is among the highest of multilateral development banks (MDBs), markedly declined in the last three years, as reflected bythedropintheratioofusablecapitaltorequiredcapital to 11.8x in 2009 (2007: 17.4x). The capital increase will considerably improve the bank’s lending headroom and allow it to maintain a sustained growth in loan disbursement in the coming years without affecting capitalisation.

Key reCeNt ratiNg ageNCy CommeNtary