ADB launches $1-B global bonds

The Asian Development Bank (ADB) said yesterday it has launched a $1-billion three-year global bond to augment its own lending operations.

The bonds, issued through a syndicate headed by Lehman Brothers and UBS Warburg, have a yield of 70 basis points over the two-year US Treasury bond.

"With its funding requirements expected to range between $5 to $7 billion in the coming years, ADB plans to undertake regular issuance of liquid benchmark bonds as a means of maintaining a strong presence in key currency bond markets," the Philippine-based lender said in a statement.

The bank said it plans one other global bond issue this year. It plans to borrow $6.4 billion for 2003.

Proceeds would support its non-concessional lending operations, the bank added.

"The distribution successfully fulfilled the expectations for strong participation from institutional investors globally with Asia accounting for about 47 percent, the United States 34 percent, and Europe and Middle East 19 percent," the ADB statement said. "With this issue, ADB has completed a total of nine benchmark global transactions since 1994 with the last issue launched in January 2002 in the form of five-year $2-billion global bonds."

The proceeds of the issue will be part of the financial institution’s ordinary capital resources and non-concessional operations.

Earlier, the ADB lowered its lending rates for US dollar and multi-currency pool-based loans.

For US dollar pool-based loans, the lending rate has been reduced to 6.31 percent per annum from 6.34 percent per annum. This reflects the average cost of borrowings for the pool of 5.71 percent yearly from July to December 2002, and a lending spread of 0.60 percent per annum.

For multi-currency pool-based loans, the lending rate has been lowered to 2.74 percent annually from 3.91 percent. This reflects the average cost of borrowings for the pool of 2.14 percent per annum and a lending spread of 0.60 percent per annum.

Meanwhile, the rebate has been increased to 0.39 percent per annum from 0.36 percent for US dollar London interbank offered rate (Libor)-based loans billed with a rate of Libor plus 0.60 percent covering the second half of 2002.

For Japanese yen Libor-based loans that were billed with Libor plus 0.60 percent per annum in the same period, the rebate has been raised to 0.39 percent annually from 0.16 percent.