The Aa1/AA/Stable-rated Caribbean Development Bank (CDB) has launched its inaugural bond offering in the Swiss Franc ( CHF ) market.
The 12-year CHF145 mn bond offering carries the lowest coupon rate, 0.297%, achieved by an international public sector issuer for this tenor, in the CHF market.
Launched on Wednesday June 15, 2016, the bond offering was facilitated by the global private bank and wealth manager Credit Suisse, which acted as sole bookrunner on the transaction. The offering also marks the first time that a borrower from the Caribbean region has accessed the CHF market successfully.
“The decision to enter into the Swiss market allows CDB the opportunity to diversify its investor base away from traditional sources. The bond offering was oversubscribed in a very short period of time, demonstrating that there is strong investor confidence in CDB, even in light of the less than optimal market conditions, including volatility due to Brexit concerns,” said CDB President, Dr. Warren Smith.
The bond offering followed meetings in Geneva and Zurich between investors and a delegation of senior CDB officials. Investor feedback was positive, allowing for the execution of the transaction immediately afterwards. Due to the strong interest shown, the order book was three times oversubscribed in 15 minutes. The final coupon rate of 0.297% was the lowest ever in CHF by an international public sector issuer (i.e. sovereign, supranational or agency) in a maturity longer than 10 years. With over 60 accounts participating, the investor base was dominated by asset managers and banks, with the rest of the trade going to pension funds and insurance companies. The successful issue in the Swiss CHF market was attributable to the inherent strength of the Bank, which is reflected in its strong public rating.
CDB’s most recent bond issue prior to this one was in 2012, when the bank raised USD300 million through the placement of a 15-year bond in the U.S. capital markets. Earlier this year, international credit rating agency, S&P Global Ratings, affirmed the Bank’s rating as ‘AA/A-1+’ with a ‘Stable’ outlook. The Bank is also rated Aa1 with a stable outlook by Moody’s Investors Service.
