ADB Sells $4.5 Billion 2-Year Global Bonds in Largest-Ever Single Tranche Outing
MANILA, PHILIPPINES (1 April 2020) — The Asian Development Bank (ADB) returned to the US dollar bond market on 31 March with the pricing of a 2-year global bond with principal amount of $4.5 billion, proceeds of which will be part of ADB’s ordinary capital resources.
“ADB is delighted to be able to show its strength in the capital markets through these very challenging times. This issue, the largest single tranche issuance in ADB’s history, enhances ADB’s liquidity to respond to Asia’s development needs during and beyond this COVID-19 crisis,” said ADB Treasurer Pierre Van Peteghem. “Targeting the 2-year point on the curve allows ADB to respond to deep investor demand as reflected in the final orderbook being over $7 billion, while still tightening the pricing from initial guidance by 5 basis points.”
The bond, with a coupon rate of 0.625% per annum payable semi-annually and a maturity date of 7 April 2022, was priced at 99.909% to yield 45.3 basis points over the 0.375% US Treasury notes due March 2022.
The transaction was lead-managed by Goldman Sachs International, Morgan Stanley, and RBC Capital Markets.
The issue achieved wide primary market distribution with 41% of the bonds placed in the Americas; 32% in Europe, Middle East, and Africa; and 27% in Asia. By investor type, 55% of the bonds went to central banks and official institutions, 25% to banks, and 20% to fund managers and other types of investors.
ADB plans to raise around $25 billion from the capital markets in 2020.
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.