ADB Returns to Indian Bond Market with $118 Million Rupee-linked Bond
MANILA, PHILIPPINES (25 February 2020) – The Asian Development Bank has raised 8.5 billion Indian rupees (INR), about $118 million, from a new issue of offshore Indian rupee-linked 10-year bonds. This represents ADB’s first new maturity raised in Indian rupees since 2017 and contributes to an established yield curve which stretches from 2021 through 2030 with INR 72.4bn ($1 billion) of outstanding bonds.
“ADB’s India rupee bonds have been a game changer for local currency operations,” said ADB Treasurer Pierre Van Peteghem. “Through issues like this, ADB contributes to capital market development, attracts foreign portfolio investment, and catalyzes the financing of new ADB loans and investments in Indian rupees. On this occasion, we are also supporting the development of financial market infrastructure by listing the bonds on India International Exchange.”
The issue sets a new benchmark in the 10-year offshore INR market, with the bonds bearing a semi-annual coupon of 6.15% and priced to yield 6.19%. The bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by JP Morgan and primarily distributed to investors in the Americas (21%) and Europe (79%). By investor type, 28% of the bonds were placed with banks and 72% with fund managers.
In a groundbreaking initiative, ADB will dual list its bonds on the Global Securities Market of India International Exchange at GIFT IFSC and the Luxembourg Stock Exchange. Commenting on the listing, Mr. V. Balasubramaniam, MD and CEO of INDIA INX said: “This is the first time a foreign issuer is doing a primary listing with India International Exchange and we are excited to welcome Asian Development Bank as a marquee issuer on our platform.”
ADB is a regular borrower in the mainstream international bond markets but has also led issuances in developing Asian countries as part of efforts to promote local currency bond markets as an alternative to bank lending. In 2019, ADB issued local currency bonds in Georgian lari, Indian rupee, Indonesian rupiah, Kazakhstan tenge, and Philippine peso.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.