ADB raises $4 billion from global bonds

MANILA, Philippines — The Asian Development Bank (ADB) raised $4 billion from the issuance of two-year and 10-year global bonds, with proceeds to form part of its ordinary capital resources to support developing member countries.

In a statement, the ADB said it raised $2 billion each from the issuance of two-year and 10-year global bonds.

“We are very pleased with the consistent support from our investors as we launched our third global benchmark outing for this year,” ADB treasurer Pierre Van Peteghem said.

“We raised $4 billion in two maturities which provide us with the resources to continue to assist our developing member countries in Asia and the Pacific.”

The two-year bond has a coupon rate of 4.625 percent per annum, payable semi-annually and has a maturity date of June 13, 2025. It was priced at 99.998 percent to yield 11.2 basis points over the 4.125 percent US Treasury notes due May 2025.

Meanwhile, the 10-year bond has a coupon rate of 3.875 percent per annum, payable semi-annually and matures on June 14, 2033. This was priced at 99.255 percent to yield 24.6 basis points above the 3.375 percent US Treasury notes due May 2033.

Deutsche Bank, JP Morgan, Credit Agricole Corporate and Investment Bank and Morgan Stanley served as lead managers for the transaction.

A syndicate group was also formed composed of CIBC, RBC Capital Markets, Scotiabank and Toronto-Dominion Bank.

The ADB said both tranches had wide primary market distribution.

For the two-year issue, 53 percent of the bonds were placed in Europe, Middle East and Africa; 24 percent in Asia; and 23 percent in the Americas.

In terms of investors, 64 percent of the bonds went to central banks and official institutions, 25 percent to banks, and 11 percent to fund managers and other types of investors.

For the 10-year issue, Europe, Middle East and Africa accounted for 44 percent; the Americas had 35 percent; and Asia got 21 percent.

By investor type, 43 percent were accounted for by central banks and official institutions, 41 percent went to banks, and 16 percent to fund managers and other types of investors.

The bond issuance is in line with ADB’s plan to raise $28 billion to $30 billion from the capital markets this year.

Most of ADB’s lending comes from its ordinary capital resources, offered at near-market terms to lower- to middle-income countries – and beginning in 2017 – at very low interest rates to lower income countries.