ADB Sells Dual-Tranche $2.5 Billion 2-Year and $1 Billion 10-Year Global Benchmark Bonds
OREANDA-NEWS. The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a dual-tranche $2.5 billion 2-year and $1 billion 10-year global benchmark bond issues, proceeds of which will be part of ADB’s ordinary capital resources and used in its non-concessional operations.
“In accessing two parts of the curve simultaneously, ADB has demonstrated its ability to remain nimble and responsive to investor needs. The engagement from different pockets of interest at the short-end and long-end further demonstrates the breadth of ADB’s investor base and confirms its position as a premier supranational issuer in the capital markets,” said ADB Treasurer Pierre Van Peteghem.
The 2-year bond, with a coupon rate of 0.875% per annum payable semi-annually and a maturity date of 26 April 2018, was priced at 99.830% to yield 20 basis points over the 0.875% US Treasury notes due March 2018. The 10-year bond, with a coupon rate of 2.000% per annum payable semi-annually and a maturity date of 24 April 2026, was priced at 99.335% to yield 27.95 basis points over the 1.625% US Treasury notes due February 2026.
The transactions were lead-managed by Bank of America Merrill Lynch, BNP Paribas, Goldman Sachs, and Mizuho International. A syndicate group was also formed consisting of Citi, BMO Capital Markets, Daiwa Securities, Deutsche Bank, HSBC, Nomura, RBC Capital Markets, SMBC Nikko, Standard Chartered, and TD Securities.
Both issues achieved wide primary market distribution with 31% of the 2-year bonds placed in Asia, 42% in Europe, Middle East, and Africa, and 27% in the Americas. By investor type, 70% of the bonds went to central banks and official institutions, 15% to banks, and 15% to fund managers and other types of investors. For the 10-year bonds, 29% was placed in Asia, 48% in Europe, Middle East and Africa and 23% in the Americas. By investor type, 32% of the bonds went to central banks and official institutions, 33% to banks, 35% to fund managers and other types of investors.
ADB plans to raise around $20 billion from the capital markets in 2016.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in Asia. It is owned by 67 members—48 from the region.