ADB sells $3.25 billion global benchmark bonds

MANILA: The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a $3.25 billion five-year global benchmark bond issue, proceeds of which will be part of ADB’s ordinary capital resources.

“We are very pleased with the strong reception to our second benchmark offering in 2018. We are happy to accommodate ongoing demand for ADB paper with this new 5-year issue following the solid performance of our dual tranche outing in January,” said ADB Treasurer Pierre Van Peteghem.

The 5-year bond, with a coupon rate of 2.75% per annum payable semi-annually and a maturity date of 17 March 2023, was priced at 2.871% to yield 25 basis points over the 2.625% US Treasury notes due 28 February 2023. The transaction was lead-managed by Bank of America Merrill Lynch, HSBC, Morgan Stanley, and RBC Capital Markets. A syndicate group was also formed consisting of Credit Agricole, Daiwa, DBS Bank, SMBC Nikko, and Wells Fargo.

The issue achieved wide primary market distribution with 39% of the bonds placed in Europe, the Middle East, and Africa, 34% in Asia, and 27% in the Americas. By investor type, 55% of the bonds went to central banks and official institutions, 27% to banks, and 18% to fund managers and other types of investors.

ADB plans to raise around $25 billion from the capital markets in 2018. 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 has more than 50 years of development partnership in the region. It is owned by 67 countries—48 from the region.