The Philippine Star

ADB rais­ing $3 B from bond is­sue

- By CZERIZA VA­LEN­CIA Business · Finance · Stocks & Markets · Investing · Financial Markets · Asian Development Bank · Manila · Philippines · Bank of America · United States of America · Citigroup · Europe · European Union · HSBC Bank · Wells Fargo · Middle East · Americas · Merrill Lynch · HSBC Bank (China) · Commerzbank · Danske Bank Group · Nordea Bank

The Asian Devel­op­ment Bank (ADB) is rais­ing $3 bil­lion from the dol­lar bond mar­ket for its non­con­ces­sional lend­ing op­er­a­tions.

The Manila-based mul­ti­lat­eral bank an­nounced that it has re­turned to the dol­lar bond mar­ket with the pric­ing of the five-year global bench­mark bond is­sue, pro­ceeds of which will be part of its or­di­nary cap­i­tal re­sources (OCT).

Fund­ing sources for OCR in­clude paid-in cap­i­tal, re­tained earn­ings (re­serves), and pro­ceeds from debt is­suance.

Thus, to fi­nance its OCR lend­ing op­er­a­tions, ADB is­sues debt se­cu­ri­ties in the in­ter­na­tional and do­mes­tic cap­i­tal mar­kets.

The Philip­pines is among ADB de­vel­op­ing mem­ber coun­tries with ac­cess to OCR fund­ing.

“Mar­ket con­di­tions have been volatile these past few months with rates march­ing steadily down­ward and swap spreads near­ing their his­tor­i­cal lows,” ADB Trea­surer Pierre Van Peteghem said.

“Fol­low­ing the pop-up in swap spreads, we saw a win­dow to bring ADB’s last global bench­mark of 2019 in the five-year part of the curve ad­ding to the ex­ist­ing three-year, five-year, and 10-year lines is­sued ear­lier on. The en­gage­ment from our in­vestor base was typ­i­cally strong and we are proud to be able to end the year on a high note.”

The five-year bond, has a coupon rate of 1.500 per­cent per an­num payable semi-an­nu­ally and a ma­tu­rity date of Oct. 18, 2024.

The trans­ac­tion was lead-man­aged by Bank of Amer­ica Mer­rill Lynch, Citi, Daiwa Cap­i­tal Mar­kets Europe Limited, and HSBC Bank plc.

A syn­di­cate group was also formed con­sist­ing of Com­merzbank, Danske Bank, DNB Bank, Nordea Bank, and Wells Fargo Se­cu­ri­ties.

With around 65 in­vestors tak­ing part, the is­sue achieved wide pri­mary mar­ket dis­tri­bu­tion with 34 per­cent of the bonds placed in Asia; 42 per­cent in Europe, Mid­dle East, and Africa; and 24 per­cent in the Amer­i­cas.

By in­vestor type, 58 per­cent of the bonds went to cen­tral banks and of­fi­cial in­sti­tu­tions, 32 per­cent to banks, and 10 per­cent to fund man­agers and other types of in­vestors.

ADB plans to raise around $24 bil­lion from the cap­i­tal mar­kets in 2019.

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