ADB Prices $1.25 Billion 3-Year Global Bond

MANILA, PHILIPPINES – The Asian Development Bank (ADB) returned to the US dollar bond market yesterday with the pricing of a $1.25 billion 3-year global benchmark bond issue. The proceeds of the Bank’s third global bond issue of the year will form part of the bank’s ordinary capital resources and will be used in its non-concessional operations.

The bonds, which carry a coupon rate of 0.50% per annum payable semiannually and a maturity date of 17 August 2015, were priced at 99.666% to yield 0.605%, or 19.55 basis points over the 0.25% US Treasury notes due May 2015.

“We are quite pleased with the transaction and the broad interest from investors resulting in a book in excess of $1.25 billion with over 40 investors,” said ADB Treasurer Mikio Kashiwagi.

The issue achieved wide primary distribution with about 52% of the bonds placed in Asia, 22% in Europe, Middle East and Africa, and 26% in the Americas.  By investor type, around 63% were bought by central banks and official institutions, 20% by fund managers, and 17% by banks and others.

The transaction was lead-managed by Credit Suisse, Deutsche Bank, HSBC, and Nomura. A syndicate group was also formed consisting of Bank of America Merrill Lynch, BNP Paribas, Citigroup, Daiwa, Goldman Sachs, JP Morgan, Morgan Stanley, RBC Capital Markets, and UBS.

ADB, which carries a AAA credit rating, plans to raise around $14 billion from the capital markets in 2012. In 2011, it raised just over $14 billion from a combination of global benchmark issues, opportunistic issues in a variety of global currencies, and private placements.