NADB raises $352m through Swiss franc green bond sale

The North American Development Bank has raised CHF340 million ($352 million) from a two-part bond deal in the Swiss bond market as part of a liability management transaction.

The development bank priced CHF180 million of new 2028 green note at 100.011 with a coupon of 0.2% to yield 0.199%, or 65 basis points over mid-swaps. It also sold CHF160 million worth of 2033 notes at 100.409 with a coupon of 0.55% to yield 0.517%, or 80 basis points over mid-swaps. 

As part of the transaction, the NADB agreed to buy back $280 million worth of existing notes. The target market was Swiss asset management and life insurance firms and pension funds. Guidance for the 2028 notes was set at 65 basis points, plus or minus five points, over mid-swaps, while guidance for the 2033 notes was set at 80 basis points, plus of minus five basis points, over mid-swaps.

"The economics of the operation were interesting, not only because rates in Switzerland are very low, but also because we were able to buy back a bond that had a higher coupon," said Julio Zamora, CFO of the San Antonio, Texas-based development bank."We also achieved longer maturities with a fixed interest rate and greater flexibility in our balance sheet."

The NADB also announced the results of a tender offer to buy back up to $225 million out of $430 million outstanding in 2.4% 2022 dollar-denominated notes. It proposed to pay $1,045 for every $1,000 in principal through 19 May. By Tuesday, a total of $378 million had been validly tendered by investors. The NADB elected to increase the size of the offer and agreed to buy $280 million or 73.63% of the validly tendered notes.