ADB raises $307 million from panda bonds

MANILA, Philippines — Manila-based Asian Development Bank has raised $307 million (two billion Chinese yuan)   from the issuance of a five-year panda bond, proceeds of which will form part of the bank’s ordinary capital resources. 

The bond issuance was ADB’s first panda bond issue in more than a decade and its largest-ever borrowing in an Asian local currency. 

Proceeds of the bond will be added to the multilateral lender’s ordinary capital resources and deployed to support its local currency operations in Chinese renminbi. 

ADB is a regular borrower in the mainstream international bond markets but has also led issuances in developing Asian countries as part of its efforts to promote local currency bond markets as an alternative to bank lending. 

The bond has a coupon rate of 3.2 percent and a five-year bullet maturity in March 2026. 

The bond was priced 21 basis points below the corresponding China Development Bank bond reference yield, and nine basis points above Chinese government bonds. 

“ADB has worked hard on our return to the Chinese domestic bond market, and is delighted with this outstanding result,” ADB treasurer Pierre Van Peteghem said. 

“The availability of competitively priced local currency liquidity is critical to supporting our development projects in China, as part of our five-year country partnership strategy,” he said. 

The offering was 1.86 times oversubscribed and widely distributed to domestic and international investors through centralized book building and auction in the China Interbank Bond Market, following a comprehensive program of investor roadshows and one-on-one meetings. 

The issue was arranged by lead underwriter and bookrunner Bank of China, with joint leads BNP Paribas, CITIC Securities Co. Ltd., and the Hongkong and Shanghai Banking Corp. Ltd. and a syndicate of relationship banks.