Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a $3.75 billion five-year global benchmark bond issue, proceeds of which will be part of ADB’s ordinary capital resources. “This transaction represents a record size for ADB in US dollars and garnered one of our largest-ever levels of subscription for a global benchmark issue allowing for pricing inside of the original guidance. So this is an extremely successful mid-curve outing for us post-Chinese New Year and affirmation from the investor community for our solid credit and mission,” the ADB Treasurer Pierre Van Peteghem in a statement Friday said.
The five-year bond, with a coupon rate of 2.000 per cent per annum payable semi-annually and a maturity date of 16 February 2022, was priced at 99.434 per cent to yield 26.95 basis points over the 1.875% US Treasury notes due January 2022.
The transaction was lead-managed by the Bank of America Merrill Lynch, HSBC, Morgan Stanley, and TD Securities. A syndicate group was also formed consisting of BMO Capital Markets, BNP Paribas, Citi, Daiwa Securities, DB, DBS Bank, ING, J.P. Morgan, Mizuho International, and RBC Capital Markets.
The issue achieved wide primary market distribution with 32 per cent of the bonds placed in Asia, 39 per cent in Europe, Middle East, and Africa, and 29 per cent in the Americas. By investor type, 44 per cent of the bonds went to central banks and official institutions, 40 per cent to banks, and 16 per cent to fund managers and other types of investors.
ADB plans to raise around $25-30 billion from the capital markets in 2017. ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 marked 50 years of development partnership in Asia.—APP