ADB returns to US dollar bond market

MANILA, Philippines: The Asian Development Bank (ADB) returned to the US dollar bond market yesterday with the pricing of a $2.5 billion, three-year global benchmark bond issue, proceeds of which will be part of the bank’s ordinary capital resources and used in its non-concessional operations. “We are very satisfied with the transaction and the robust and broad sponsorship from investors globally, which resulted in a comfortably oversubscribed book,” said ADB Treasurer Mikio Kashiwagi.

The bonds, with a coupon rate of 0.5% per annum payable semi-annually and a maturity date of June 20, 2016, were priced at 99.833% to yield 15.8 basis points over the 0.375% US Treasury notes due in February 2016.

The transaction was lead-managed by BNP Paribas, Citi, HSBC, and J.P. Morgan. A syndicate group was also formed consisting of Credit Suisse, Daiwa Capital Markets, Deutsche, Goldman Sachs International, Morgan Stanley, Nomura, RBC Capital Markets, SMBC Nikko, Standard Chartered and TD Securities.

The deal marks ADB's second global issue in the US dollar global bond market in 2013, having issued bonds with a seven-year maturity in January this year.

As with previous ADB benchmark transactions, the issue achieved extensive primary market distribution with 49% of the bonds placed in Asia, 32% in Europe, Middle East and Africa, and 19% in the Americas. By investor type, 58% of the bonds went to central bank and official institutions, 30% to banks, 10% to fund managers, and 2% to other types of investors.

ADB plans to raise $12 billion to $14 billion from the bond markets in 2013.

-BBC