The Asian Development Bank (ADB) returned to the US dollar bond market for the second time this year, raising US$3.25 billion in a three-year offering, the proceeds of which will be part of the bank’s ordinary capital resources.
The new bonds issued on July 10, was priced at 99.898% with a coupon of 1.875% per annum to yield 7.75bp over the US treasuries. The transaction was lead-managed by Bank of America Merrill Lynch, BNP Paribas, Citi and TD Securities. A syndicate group was also formed consisting of Commerzbank, DBS, Deutsche Bank, DNB Bank and Nordea Bank.
With more than 75 investors taking part, the issue achieved broad primary market distribution with 59% of the bonds placed in Asia, 24% in the Americas and 17% in Europe, Middle East and Africa (EMEA). By types of investors, 71% of the bonds were sold to central banks and official institutions, 21% to banks, and 8% to fund managers and other investors.
“The breadth and depth of investor sponsorship enjoyed by ADB was demonstrated by the achievement of a sizeable order book,” says ADB treasurer Pierre Van Peteghem. “This high level of support, which enabled ADB to tighten the price guidance against a volatile market backdrop, highlights the high regard for ADB’s credit and development mandate.”
ADB plans to raise around US$21 billion from the capital markets in 2019. In 2018, it made commitments of new loans and grants amounting to US$21.6 billion.
In January, ADB priced US$3.5 billion worth of global bonds in its first US dollar fundraising in 2019. The five-year paper was printed at 99.498% with a coupon of 2.625% to offer a yield of 14.9bp over the US treasuries. The transaction, with over 80 investors participating, was lead-managed by Goldman Sachs, J.P. Morgan, Mizuho Securities and RBC Capital Markets.