ADB returns to US dollar bond market

2 April 2020 16:01 (UTC+04:00)

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The Asian Development Bank (ADB) returned to the US dollar bond market on Mar. 31 with the pricing of a two-year global bond with principal amount of $4.5 billion, proceeds of which will be part of ADB’s ordinary capital resources, Trend reports with reference to ADB.

“ADB is delighted to be able to show its strength in the capital markets through these very challenging times. This issue, the largest single tranche issuance in ADB’s history, enhances ADB’s liquidity to respond to Asia’s development needs during and beyond this COVID-19 crisis. Targeting the 2-year point on the curve allows ADB to respond to deep investor demand as reflected in the final orderbook being over $7 billion, while still tightening the pricing from initial guidance by 5 basis points,” said ADB Treasurer Pierre Van Peteghem.  

The bond, with a coupon rate of 0.625 percent per annum payable semi-annually and a maturity date of Apr. 7, 2022, was priced at 99.909 percent to yield 45.3 basis points over the 0.375 percent US Treasury notes due March 2022.

The transaction was lead-managed by Goldman Sachs International, Morgan Stanley, and RBC Capital Markets.

The issue achieved wide primary market distribution with 41 percent of the bonds placed in the Americas; 32 percent in Europe, Middle East, and Africa; and 27 percent in Asia.

By investor type, 55 percent of the bonds went to central banks and official institutions, 25 percent to banks, and 20 percent to fund managers and other types of investors.

ADB said that it plans to raise around $25 billion from the capital markets in 2020.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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