MANILA, PHILIPPINES - The Asian Development Bank (ADB) today priced its 2nd renminbi-denominated bonds (Panda) in the domestic capital market of the People's Republic of China (PRC). The issue has a principal amount of RMB 1 billion and a bullet maturity of 10 years.
"ADB would like to thank the PRC Government for its valuable support in our funding operations," said ADB Vice-President Bindu Lohani. "ADB is extremely pleased to have come back to the PRC bond market after the successful issuance of our landmark Panda Bonds in 2005. We are honoured to have been one of the first multilateral institutions to have issued RMB bonds in the PRC and contribute to the further development of the PRC bond market."
Priced at par, the Panda bonds carry an annual coupon of 4.2% per annum and have a maturity date of 8 December 2019. Prior to pricing, ADB and the sole lead manager, China International Capital Corporation Limited (CICC), conducted roadshows in Beijing and Shanghai to present the deal to institutional investors.
Offered through a book-building process, the issue achieved a broad distribution with up to 50% of the bonds placed with domestic banks, 15% with foreign banks, and 35% with insurance companies. The bonds will be traded in the interbank market with clearing and settlement through The China Government Securities Depository Trust and Clearing Co., Ltd.
Dr. Wei Ding, Managing Director and Head of Investment Banking, said, "We want to congratulate ADB on a very successful offering. The Panda bonds bring in a welcome diversification for domestic investors. The transaction will be an excellent benchmark for other international issuers to come."
ADB will use the proceeds of the Panda bonds to fund private sector clean energy and energy efficiency projects in PRC. The objective is to help reduce currency mismatches for borrowers that have no foreign exchange earnings.
This offering of Panda bonds is further evidence of ADB's commitment to the development of regional bond markets. Since 2004, ADB has completed five other market-opening transactions in the region's local currency bond markets. In addition to local currency bond issuances, ADB also undertakes cross-currency swaps to meet local currency funding requirements of its development projects.
ADB aims to pursue its local currency bond issuances in other Asian markets particularly in those developing member countries where bond proceeds can either be swapped into one of ADB's operating currencies or be retained to finance ADB projects that require local currency financing.