MANILA, Philippines — The Asian Development Bank (ADB) is raising $4.25 billion from the US bond market to bolster its ordinary capital resources (OCR).
The multilateral bank said yesterday it has returned to the dollar bond market on Jan. 15 with the pricing of a three-year global benchmark bond worth $2.25 billion and a 10-year global benchmark bond worth $2 billion, the proceeds of which will be part of the OCR.
ADB’s OCR operations cover loans for projects related to agriculture and natural resources, education, energy, finance, health and social protection, industry and trade, public sector management, transport and information, communication technology, water supply as well as municipal infrastructure and services.
OCR loans are provided to developing member countries (DMCs) that have attained a higher level of economic development.
Funding sources for OCR include paid-in capital, retained earnings (reserves), and proceeds from debt issuance.
To finance its OCR lending operations, ADB issues debt securities in the international and domestic capital markets.
The Philippines is among ADB developing member countries with access to OCR funding.
“The dollar market has seen a very active start to the new year,” said ADB treasurer Pierre Van Peteghem. “ADB is very pleased to make its first outing a strong one.”
The three-year bond, with a coupon rate of 1.625 percent per annum payable semi-annually matures on Jan. 24, 2023.
The 10-year bond, meanwhile, with a coupon rate of 1.875 per annum payable semi-annually matures on Jan. 24, 2030.
The transaction was lead-managed by Barclays, J.P. Morgan, Nomura and RBC Capital Markets. A syndicate group was also formed consisting of ANZ, Commerzbank, ING, Credit Agricole and Natwest Markets.
ADB said both issues achieved wide primary market distribution with 37 percent of the three-year bonds placed in Asia, 37 percent in the Americas, and 26 percent in Europe, Middle East and Africa.
By investor type, 51 percent of the bonds went to central banks and official institutions, 35 percent to banks, and 14 percent to fund managers and other types of investors.
For the 10-year bonds, 55 percent were placed in Europe, Middle East, and Africa; 31 percent in Asia; and 14 percent in the Americas.
By investor type, 36 percent of the bonds went to central banks and official institutions, 44 percent to banks, 20 percent to fund managers, and other types of investors.
ADB plans to raise around $25 billion from the capital markets in 2020.