The Asian Development Bank (ADB) has returned to the US dollar bond market with the pricing of a $3 billion 5-year global benchmark bond, proceeds of which will be part of ADB’s ordinary capital resources and used in its non-concessional operations.
“This is another stellar outcome for ADB against a challenging market backdrop that has prevailed since the beginning of 2016. Strong demand for the transaction allowed us to size a $3 billion new issue in line with our strategy of providing the market with liquid benchmark bonds across the curve,” said ADB Treasurer Pierre Van Peteghem. “We were pleased by the broad participation across geographical regions from the investor community, which is itself a testament to the institution’s robust credit fundamentals and loyal global following in the capital markets.”
The 5-year bond, with a coupon rate of 1.625% per annum payable semi-annually and a maturity date of 16 March 2021, was priced at 99.923% to yield 31.35 basis points over the 1.125% US Treasury notes due February 2021.The transaction was lead-managed by Citi, J.P. Morgan, Nomura and RBC Capital Markets. A syndicate group was also formed consisting of Bank of America Merrill Lynch, Bank of Montreal, BNP Paribas, Daiwa Securities, DBS Bank, Deutsche Bank, Goldman Sachs, HSBC, Mizuho International, and Morgan Stanley.
The issue achieved wide primary market distribution with 46% of the bonds placed in Asia, 29% in Europe, Middle East, and Africa, and 25% in the Americas. By investor type, 58% of the bonds went to central banks and official institutions, 29% to banks, and 13% to fund managers and other types of investors.
ADB plans to raise around $20 billion from the capital markets in 2016.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.