ADB sells $4.5 bln year global benchmark bond

Islamabad: The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of $4.5 billion 5-year global benchmark bond issue, proceeds of which would be part of ADB’s ordinary capital resources.

“ADB recently tripled the size of its response to the COVID-19 pandemic that is affecting economies in Asia and the Pacific, and this transaction facilitates ADB’s capacity to support our clients in addressing the urgent challenges they are currently facing,” said ADB Treasurer Pierre Van Peteghem according to statement received here.

“The orderbook, we were able to garner for this 5-year issue is ADB’s largest-ever recorded, and demonstrates the robust support from our investor base for ADB’s efforts in safeguarding the economic, social, and development gains made in the region,” Peteghem added.

The 5-year bond, with a coupon rate of 0.625% per annum payable semi-annually and a maturity date of 29 April 2025, was priced at 99.818% to yield 34.35 basis points over the 0.500% US Treasury notes due March 2025.

The transaction was lead-managed by Bank of America, Citi, TD Securities, and HSBC Bank plc. A syndicate group was also formed consisting of Bank of Montreal, BNP Paribas, Deutsche Bank, SEB, and Nordea Bank.

With around 130 investors taking part, the issue achieved wide primary market distribution with 35% of the bonds placed in Asia; 34% in Europe, Middle East, and Africa; and 31% in the Americas.

By investor type, 56% of the bonds went to central banks and official institutions, 26% to banks, and 18% to fund managers and other types of investors.

ADB plans to raise around $28 billion from the capital markets in 2020, the statement added.