ADB raises USD 5 B in dual-tranche global benchmark bonds to propel development initiatives across Asia and the Pacific
Jan 05, 2024
New Delhi [India], January 5 : The Asian Development Bank (ADB) has successfully priced a dual-tranche global benchmark bond, securing USD 3 billion for a 3-year issuance and USD 2 billion for a 10-year issuance.
According to ADB, the funds raised will contribute to ADB's ordinary capital resources, dedicated to fostering social and economic development across the expansive region of Asia and the Pacific.
ADB Treasurer, Pierre Van Peteghem, expressed satisfaction with the strong and consistent support received from investors during the first US dollar global benchmark outing for 2024.
He stated, "We are very pleased with the strong and consistent support of our investors on our first US dollar global benchmark outing for 2024. This provides us with additional resources as we actively support our developing member countries in our evolving mission to address challenges confronting Asia and the Pacific."
The 3-year bond, featuring a coupon rate of 4.125 per cent per annum payable semi-annually, matures on January 12, 2027. Priced at 99.663 per cent, it yields 11.9 basis points over the 4.375 per cent US Treasury notes due December 2026.
On the other hand, the 10-year bond, mirroring the coupon rate and semi-annual payment structure, matures on January 12, 2034.
Priced at 99.530 per cent, it yields 21.3 basis points over the 4.5 per cent US Treasury notes due November 2033.
The transaction was lead-managed by BofA Securities, Morgan Stanley, RBC Capital Markets, and TD Securities.
A syndicate group, including CIBC Capital Markets, Daiwa Capital Markets Europe, NatWest Markets, Standard Chartered Bank, and Scotiabank, played a key role in the success of both tranches.
Primary market distribution for the 3-year issue saw 36 per cent of bonds placed in Europe, the Middle East, and Africa; 33 per cent in Asia; and 31 per cent in the Americas.
Notably, 66 per cent of the bonds found their way to central banks and official institutions, 21 per cent to banks, and 13 per cent to fund managers and other investors.
For the 10-year issue, distribution included 54 per cent in Europe, the Middle East, and Africa; 29 per cent in the Americas; and 17 per cent in Asia.
Among investor types, 50 per cent of bonds were allocated to banks, 28 per cent to central banks and official institutions, and 22 per cent to fund managers and other investors.
Looking ahead, ADB aims to raise approximately USD 30 billion-USD 34 billion from capital markets in 2024, reinforcing its commitment to spearheading crucial development initiatives across the region.
