MANILA, PHILIPPINES - The Asian Development Bank returned to the US dollar bond market yesterday with the pricing of a US$1 billion 10-year global benchmark bond issue, proceeds of which will be part of the bank's ordinary capital resources and used in its non-concessional operations.
The bonds, with a coupon rate of 5.25% per annum payable semiannually and a maturity date of 12 June 2017, were priced at 99.485% to yield 38 basis points over the 4.5% US Treasury note due May 2017.
The transaction was lead-managed by Daiwa, Deutsche Bank and Morgan Stanley. A syndicate group was also formed consisting of Citigroup, Credit Suisse, Dresdner, Goldman Sachs, JP Morgan, Merrill Lynch, Mitsubishi Securities, Nomura, Royal Bank of Canada and UBS 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 $1.3 billion," said ADB Treasurer Mikio Kashiwagi. "This allowed ADB to launch and price the issue on the same day. The interest from investors in North America is the strongest we have seen, a reflection of more compelling pricing against US agencies as well as ADB's on-going investor relations work in the region"
About 41% of the bonds were placed in Asia, 38% in the US, and 21% in Europe and the Middle East. By investor types, around 60% of the bonds were bought by central banks, 19% by fund managers, 11% by banks and 10% by pension funds.
To-date, ADB has raised more than US$5 billion in 11 currencies through various transactions, including the new US dollar benchmark transaction, two public bond issues in Canadian dollars and Pound sterling, and four local currency bond issues in Hong Kong, Malaysia, Philippines, and Singapore. ADB plans to raise between $6 to $8 billion in 2007.