ADB raises $3.5 B from bond issuance

MANILA, Philippines — Manila-based Asian Development Bank has raised $3.5 billion from a five-year dollar bond issuance, the proceeds of which will form part of its ordinary capital resources.

The global benchmark bond issue is ADB’s first issuance for the year in line with its goal of raising around $23 million from the capital markets this year.

Most of ADB’s lending comes from its ordinary capital resources, offered at near-market terms to lower- to middle-income countries, and beginning in 2017, at very low interest rates to lower income countries.

The five-year bond has a coupon rate of 2.625 percent per annum payable semi-annually and a maturity date of Jan. 30, 2024.

“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. ADB’s decision to go out was duly rewarded with a strong orderbook that held together at the tightest pricing for a USD five-year global benchmark bond so far in 2019,” he added.

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.

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, 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.