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MANILA, PHILIPPINES - The Asian Development Bank (ADB) returned to the US dollar bond market on Tuesday for the second time this year by selling a US$1 billion, 3-year global benchmark bond.

The bond, proceeds of which will be used in ADB’s non-concessional operations, attracted orders worth more than $2 billion. The central banks were the largest purchasers of the paper.

The bonds, with a coupon rate of 4.375% per annum payable semiannually and a maturity date of 17 September 2010, were priced at 99.903% to yield 50.5 basis points over the 4.50% US Treasury note due May 2010.

The transaction was lead-managed by Citi, Nomura and UBS. A syndicate group was also formed consisting of Credit Suisse, Daiwa, Deutsche Bank, Dresdner, HSBC, JP Morgan, Merrill Lynch, Mitsubishi UFJ Securities, Morgan Stanley and RBC as co-lead managers.

“We are very pleased with the transaction. The response from investors was quite strong, resulting in a high quality book exceeding $2 billion,” said ADB Treasurer Mikio Kashiwagi. “This allowed ADB to launch and price the issue on the same day. The interest from central bank investors is the strongest we have seen.”

About 34% of the bonds were placed in Asia, 8% in North America, and 52% in Europe, with the remainder having been sold in other regions. By investor types, around 72% were bought by central banks, 26% by fund managers, and 2% by banks and other investors.

To date this year, ADB has raised close to US$8 billion through various transactions, including 2 US dollar benchmark transactions, two public bond issues in Canadian dollars and Pound sterling, and four local currency bond issues in Hong Kong, China, Malaysia, the Philippines, and Singapore. ADB has the capacity to raise up to $9 billion in 2007, subject to favorable market conditions.

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