MANILA, PHILIPPINES - The Asian Development Bank (ADB) returned to the US dollar bond market yesterday with the pricing of a $3 billion 5-year global benchmark bond issue. The proceeds of the Bank's first 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 1.125% per annum payable semiannually and a maturity date of 15 March 2017, were priced at 99.866% to yield 1.152%, or 31.1 basis points over the 0.875% US Treasury notes due December 2016.
"We are exceptionally pleased with the transaction and the strong interest from investors reflected in an oversubscribed book of more than $4 billion and over 80 investors," said ADB Deputy Treasurer, Kazuki Fukunaga.
The issue achieved broad primary distribution with about 52% of the bonds placed in Asia, 29% in Europe, Middle East and Africa, and 19% in the Americas. By investor type, around 63% were bought by central banks and official institutions, 20% by fund managers, and 14% by banks. The rest went to a variety of other types of investors.
The transaction was lead-managed by Goldman Sachs, JP Morgan, Morgan Stanley, and RBC Capital Markets. A syndicate group was also formed consisting of Bank of America Merrill Lynch, BNP Paribas, Credit Suisse, Daiwa, Deutsche Bank, HSBC, Jefferies, Mitsubishi UFJ Securities, Nomura, and UBS.
ADB, which carries a AAA credit rating, plans to raise around $14-16 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.