IN order to boost its ordinary capital resources, the Asian Development Bank (ADB) returned to the US dollar bond market to raise $3.5 billion from a five-year global benchmark bond.
This is the Manila-based multilateral development bank’s first issuance in 2019 and is in line with its plans to raise $23 billion from the capital markets this year.
The bond has a coupon rate of 2.625 percent per annum payable semi-annually and a maturity date of January 30, 2024. It was priced at 99.498 percent to yield 14.9 basis points over the 2.625 percent US Treasury notes due December 2023.
“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 marks 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 USD five-year global benchmark bond so far in 2019.”
With over 80 investors taking part, the issue achieved wide primary market distribution with 44 percent of the bonds placed in Asia; 41 percent in Europe, Middle East, and Africa; and 15 percent in the Americas.
By investor type, the ADB said around 54 percent of the bonds went to central banks and official institutions, 36 percent to banks, and 10 percent to fund managers and other types of investors.
The transaction was lead-managed by Goldman Sachs International, J.P. Morgan, 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.
The ADB is committed to achieving a prosperous, inclusive,
resilient, and sustainable Asia and the Pacific, while sustaining its efforts
to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48
from the region.