ADB raises P5.22 billion from maiden issue of local currency bonds in international market

MANILA, Philippines — Manila-based Asian Development Bank (ADB) has raised P5.22 billion from a maiden issuance of local currency (LCY) bonds in the international market.

It said the proceeds of the four-year maturing bonds would support ADB’s growing  local currency operations in the Philippines and would help reduce foreign exchange risk for ADB’s borrowers.

This is the first time the bank issued local currency bonds to international investors.

As these bonds are currency-linked, interest payments and principal repayments would be valued based on the Philippine peso, but would be settled in US dollars.

The bonds pay a fixed interest rate of 5.25 percent and has a four-year maturity.

ADB has issued bonds in the Philippine  capital market in 2005 and 2007.

“ADB is delighted to support the capital markets in the Philippines where ADB is based,” said ADB treasurer Pierre Van Peteghem.

“Our program to issue local currency bonds in ADB member countries has been very successful. We hope that the Philippines can become a cornerstone of this program moving forward,” he added.

The bonds were fully placed with institutional investors in Asia, Europe and the Americas. JP Morgan acted as sole lead manager.

ADB is a regular borrower in mainstream international bond markets, but has also led issuance in developing Asian countries as part of efforts to promote domestic bond markets as an alternative to bank lending.

In 2018, ADB has raised more than $23.5 billion from the capital markets.