ADB issues $3.5b five-year bond

Its proceeds will go to the bank’s capital resources

ISLAMABAD: The Asian Development Bank (ADB) has returned to the US dollar bond market with the pricing of a $3.5-billion five-year global benchmark bond issue, the proceeds of which will be part of the bank’s ordinary capital resources.

“The transaction was our first global benchmark outing of the year and the timing pleased our investor base,” said ADB Treasurer Pierre Van Peteghem.

“We watched as the first wave of sovereigns, supranationals and agencies supply was well absorbed by the market and secondary markets tightened steadily reflecting solid performance. The ADB’s decision to go out was duly rewarded with a strong order book that held together at the tightest pricing for a US dollar five-year global benchmark bond so far in 2019.”

The bond, with coupon rate of 2.625% per annum payable semi-annually and maturity date of January 30, 2024, was priced at 99.498% to yield 14.9 basis points over 2.625% US Treasury notes due in December 2023.

The transaction was lead-managed by Goldman Sachs, JPMorgan, Mizuho Securities and RBC Capital Markets. A syndicate group was also formed consisting of Commerzbank, Danske Bank, Daiwa Capital Markets, Deutsche Bank and Wells Fargo Securities.

With over 80 investors taking part, the issue achieved wide primary market distribution with 44% of the bonds placed in Asia; 41% in Europe, Middle East and Africa; and 15% in the Americas.

By investor type, 54% of the bonds went to central banks and official institutions, 36% to banks and 10% to fund managers and other types of investors.

The ADB plans to raise around $23 billion from the capital markets in 2019.

It is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.