ADB eyes $2B float for Covid battle

We appreciate the strong support of our investors for this new 10-year global bond issue

The Asian Development Bank (ADB) priced yesterday a $2-billion 10-year global bond, proceeds of which will be part of ADB’s ordinary capital.

The 10-year bond, with a coupon rate of 1.5 percent per annum payable semi-annually and a maturity date of 4 March 2031, was priced at 99.088 percent to yield 18.35 basis points over the 1.125 percent US Treasury notes due February 2031.

ADB plans to raise around $30 billion to $35 billion from the capital markets in 2021.

“We appreciate the strong support of our investors for this new 10-year global bond issue,” ADB Treasurer Pierre Van Peteghem said.

“This is our second successful outing in the US dollar market this year. The constructive result provides us with more resources to support our developing members in Asia and the Pacific, especially those most affected by the pandemic,” he added.

The transaction was lead-managed by JP Morgan, Nomura, RBC, and TD Securities. A syndicate group was also formed consisting of ANZ, Credit Agricole CIB, ING, Natixis, and Scotiabank.

The issue achieved wide primary market distribution with 27 percent of the bonds placed in Asia; 48 percent in Europe, Middle East and Africa; and 25 percent in the Americas.

Top grade affirmed

Moody’s Investors Service and Standard and Poors Global Ratings have affirmed prime ratings for the issue.

This is our second successful outing in the US dollar market this year.

“ADB’s Aaa issuer rating is anchored by the institution’s ample capital adequacy, supported by a strong risk management framework and preferred creditor status that contributes to strong asset performance,” according to Moody’s.

“We believe that the bank will continue to deliver on its enhanced lending capacity after the merger of the Asian Development Fund and Ordinary Capital Resource, thus solidifying its policy importance while preserving its extremely strong capital position,” S&P said in a report.

“We are affirming our ‘AAA’ long-term and ‘A-1+’ short-term issuer credit ratings on ADB,” it added.