ADB Sells $4 Billion Dual-Tranche 3- and 10-Year Global Benchmark Bonds

By India Education Diary Bureau Admin On Oct 1, 2020

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a 3-year global benchmark bond worth $3 billion and a 10-year global benchmark bond worth $1 billion, proceeds of which will be part of ADB’s ordinary capital resources.

“We are pleased with the consistently reliable and strong support of our investors as we launched our last US dollar benchmark outing for 2020 with a dual tranche 3- and 10-year transaction,” said ADB Treasurer Pierre Van Peteghem. “This has been a record-breaking year for us with over $24 billion raised in the global benchmark market through six outings. This strong support gives us the resources to provide much-needed assistance to Asia and the Pacific, especially during these challenging times.”

The 3-year bond, with a coupon rate of 0.25% per annum payable semi-annually and a maturity date of 6 October 2023, was priced at 99.893% to yield 14 basis points over the 0.125% US Treasury notes due September 2023.

The 10-year bond, with a coupon rate of 0.75% per annum payable semi-annually and a maturity date of 8 October 2030, was priced at 98.852% to yield 22.66 basis points over the 0.625% US Treasury notes due August 2030.

The transaction was lead-managed by BNP Paribas, Nomura, RBC Capital Markets, and TD Securities. A syndicate group was also formed consisting of ANZ, ING, and Standard Chartered.

Both tranches achieved wide primary market distribution. On the 3-year bond, 36% of the bonds were placed in Asia; 29% in Europe, Middle East, and Africa; and 35% in the Americas. By investor type, 55% of the bonds went to central banks and official institutions, 25% to banks, and 20% to fund managers and other types of investors. On the 10-year bond, 46% of the bonds were placed in Asia; 22% in Europe, Middle East, and Africa; and 32% in the Americas. By investor type, 54% of the bonds went to central banks and official institutions, 18% to banks, and 28% to fund managers and other types of investors.

ADB plans to raise around $30 billion to $35 billion from the capital markets in 2020.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.