ADB returns to US dollar bond market to boost capital resources
THE Asian Development Bank (ADB) returned to the US dollar bond market to boost its ordinary capital resources.
In a statement, ADB said it issued $3 billion worth of five-year global bonds with a coupon rate of 0.375 percent per annum payable semi-annually.
The bonds have a maturity date of 3 September 2025 and priced at 99.556 percent to yield 15.4 basis points over the 0.25-percent US Treasury notes due July 2025.
“We looked at the post-summer issuance window and saw an opportunity to add a new five-year to our global benchmark curve,” said ADB Treasurer Pierre Van Peteghem.
“With most of the immediate
action in the dollar market situated around the long end, we felt that the mid part of the curve was relatively undersupplied and decided to capitalize on pent-up demand,” he added.
The issue achieved wide primary market distribution with 41 percent of the bonds placed in Asia; 34 percent in Europe, the Middle East and Africa; and 25 percent in the Americas.
By investor type, 52 percent of the bonds went to central banks and official institutions, 31 percent to banks, and 17 percent to fund managers and other types of investors.
The transaction was leadmanaged by Bank of America, Credit Agricole CIB, Citi and Jpmorgan. A syndicate group was also formed consisting of ANZ, BNP Paribas, DBS Bank Ltd., Natixis and Rabobank.
“The result was a strong one with an oversubscribed order book for a $3-billion benchmark print that will provide much-needed resources to support ADB’S increased assistance to its regional members in 2020,” Peteghem said.
ADB plans to raise around $30 billion to $35 billion from the capital markets in 2020. The ADB’S latest bond float is the third for the year.
In July, ADB said it raised $4 billion from a three-year global bond issue. In January, the ADB tapped the US bond market and raised $4.25 billion.