January 16, 2020: The Asian Development Bank (ADB) returned to the US dollar bond market on with the pricing of a 3-year global benchmark bond worth $2.25 billion and a 10-year global benchmark bond worth $2.0 billion, proceeds of which will be part of ADB’s ordinary capital resources, an ADB press release said on Thursday.

“The dollar market has seen a very active start to the new year,” said ADB Treasurer Pierre Van Peteghem . “ADB is very pleased to make its first outing a strong one. The dual 3-year and 10-year tranche approach allowed ADB to respond to investor demand on both ends of the maturity spectrum as reflected in the final orderbook being over $6.5 billion.

It is also noteworthy that this 10-year transaction opened the market for supranationals in that tenor and equaled ADB’s largest 10-year transaction to date.”

The 3-year bond, with a coupon rate of 1.625 percent per annum payable semi-annually and a maturity date of 24 January 2023, was priced at 99.953 percent to yield 7.7 basis points over the 1.5 percent US Treasury notes due January 2023.

The 10-year bond, with a coupon rate of 1.875 percent per annum payable semi-annually and a maturity date of 24 January 2030, was priced at 99.610 percent to yield 13.25 basis points over the 1.75 percent US Treasury notes due November 2029.

The transaction was lead-managed by Barclays, J.P. Morgan, Nomura, and RBC Capital Markets. A syndicate group was also formed consisting of ANZ, Commerzbank, ING, Credit Agricole, and Natwest Markets.

Both issues achieved wide primary market distribution with 37 percent of the 3-year bonds placed in Asia, 37 percent in the Americas, and 26 percent in Europe, Middle East, and Africa.

By investor type, 51 percent of the bonds went to central banks and official institutions, 35 percent to banks, and 14 percent to fund managers and other types of investors. 

For the 10-year bonds, 55 percent were placed in Europe, Middle East, and Africa; 31 percent in Asia; and 14 percent in the Americas. By investor type, 36 percent of the bonds went to central banks and official institutions, 44 percent to banks, 20 percent to fund managers, and other types of investors.

ADB plans to raise around $25 billion from the capital markets in 2020.

APP

32164