ADB raises $27 B from capital markets

Manila-based Asian Development Bank (ADB) has met the lower end of its fund raising goal from the capital markets this year, having raised $27 billion.

The bank aims to raise between $27 billion to $30 billion this year mostly to fortify its ordinary capital resources (OCR) which fund a wide range of the bank’s operations in the areas of agriculture and natural resources, education, energy, finance, health and social protection, industry and trade, public sector management, transport and information and communication technology, water supply, and municipal infrastructure and services.

The OCR also supports low-carbon and climate resilient projects.

Regular market-based OCR loans are generally made to developing member countries (DMCs) that have attained a higher level of economic development while concessional OCR loans are made to lower-income DMCs.

“ADB has raised around $27 billion so far this year from the capital markets,” the bank said in a statement.

ADB announced the recent issuance of $1.5 billion 10-year bonds, the proceeds of which would also be part of its OCR. The 10-year bond bears a coupon rate of 2.50 percent per annum payable semi-annually and a maturity date of Nov. 2, 2027.

ADB treasurer Pierre Van Peteghem said the strong reception to the latest issuance “highlights the esteem for ADB’s credit and mission.”

The transaction was lead-managed by Citi, Daiwa Securities, HSBC, and J.P. Morgan. A syndicate group was also formed consisting of DBS, Deutsche Bank, ING, Morgan Stanley, Nomura and RBC.

The issue achieved wide primary market distribution with 56 percent of the bonds placed in Asia, 33 percent in the Americas, and 11 percent in Europe, Middle East and Africa.

By investor type, 56 percent of the bonds went to central banks and official institutions, 31 percent to fund managers, 11 percent to banks, and two percent to other types of investors

In 2016, ADB’s total assistance reached $31.7 billion, including $14 billion in cofinancing with other development institutions.