ADB sells $3.5B 5-Year bond

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a $3.5 billion five-year global benchmark bond issue, proceeds of which will be part of ADB’s ordinary capital resources.

“The transaction was our first global benchmark outing of the year and the timing pleased our investor base,” said ADB Treasurer Pierre Van Peteghem.

“We watched as the first wave of sovereigns, supranationals and agencies supply was well absorbed by the market and secondary marks tightened steadily reflecting solid performance. ADB’s decision to go out was duly rewarded with a strong orderbook that held together at the tightest pricing for a US dollar five-year global benchmark bond so far in 2019.”

The five-year bond, with a coupon rate of 2.625 percent per annum payable semi-annually and a maturity date of 30 January 2024, was priced at 99.498 percent to yield 14.9 basis points over the 2.625 percent US Treasury notes due December 2023.

The transaction was lead-managed by Goldman Sachs International, J.P. Morgan, Mizuho Securities and RBC Capital Markets. A syndicate group was also formed consisting of Commerzbank, Danske Bank, Daiwa Capital Markets, Deutsche Bank and Wells Fargo Securities.

With over 80 investors taking part, the issue achieved wide primary market distribution with 44 percent of the bonds placed in Asia; 41 percent in Europe, Middle East and Africa; and 15 percent in the Americas.

By investor type, 54 percent of the bonds went to central banks and official institutions, 36 percent to banks and 10 percent to fund managers and other types of investors.

ADB plans to raise around $23 billion from the capital markets in 2019.

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 67 members – 48 from the region.