fbpx ADB Issues 15-Year Indonesian Rupiah-Linked Bond | Asian Development Bank

ADB Issues 15-Year Indonesian Rupiah-Linked Bond

News Release | 12 March 2019

MANILA, PHILIPPINES (12 March 2019) — The Asian Development Bank (ADB) has raised 1.2 trillion Indonesian rupiah (about $84 million) from a new issue of offshore Indonesian rupiah-linked bonds.

The transaction was structured as a 15-year fixed rate bond maturing in March 2034, making it the longest tenor local currency bond ever issued by ADB. Previously, ADB had issued 10- and 11-year bonds in Chinese renminbi, Indian rupees, and Indonesian rupiah, but longer maturities had proven elusive.

ADB has supported the development of the region’s capital markets since 1970, having issued in multiple currencies and formats.

“The growth of local currency bond markets is of strategic importance to developing countries in Asia,” said ADB Treasurer Mr. Pierre Van Peteghem. “But the challenge often remains in sourcing funding with sufficient tenor to support ADB’s long dated loans. With this 15-year bond issue, ADB is not only solving that mismatch, but also establishing a benchmark for other issuers to follow.”

The bond issue, denominated in Indonesian rupiah but settled in US dollars, was underwritten by JP Morgan as sole lead manager. The new issue bears a semi-annual coupon of 7.80%. The bonds were placed 70% in Europe and 30% in Americas, with institutions, banks, and retail investors participating.

Proceeds from the bonds will be mobilized to support ADB’s local currency lending in Indonesia. In 2017, ADB committed $2.035 billion in sovereign and nonsovereign loans, technical assistance, and grants to Indonesia. Indonesia is among ADB’s largest sovereign borrowers.  

ADB is a regular borrower in the mainstream international bond markets but has also led issuance in developing Asia as part of its efforts to promote domestic bond markets as an alternative to bank lending. So far this year, ADB has raised $180 million from bond issues in Kazakhstan and the Philippines.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.