ADB Issues $3 Billion 5-Year Global Benchmark Bond

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a $3 billion 5-year global bond, proceeds of which will be part of ADB’s ordinary capital resources.

“We looked at the post-summer issuance window and saw an opportunity to add a new 5-year to our global benchmark curve,” said ADB Treasurer Pierre Van Peteghem. “With most of the immediate action in the dollar market situated around the long end, we felt that the mid part of the curve was relatively undersupplied and decided to capitalize on pent-up demand. The result was a strong one with an oversubscribed orderbook for a $3 billion benchmark print that will provide much-needed resources to support ADB’s increased assistance to its regional members in 2020.”

The 5-year bond, with a coupon rate of 0.375% per annum payable semi-annually and a maturity date of 3 September 2025, was priced at 99.556% to yield 15.4 basis points over the 0.25% US Treasury notes due July 2025.

The transaction was lead-managed by Bank of America, Credit Agricole CIB, Citi, and J.P. Morgan. A syndicate group was also formed consisting of ANZ, BNP Paribas, DBS Bank Ltd., NATIXIS, and Rabobank.

The issue achieved wide primary market distribution with 41% of the bonds placed in Asia; 34% in Europe, Middle East, and Africa; and 25% in the Americas. By investor type, 52% of the bonds went to central banks and official institutions, 31% to banks, and 17% to fund managers and other types of investors.

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