ADB sells $5.5 bn dual global benchmark bonds

It gets additional resources to assist developing member countries

Plans to raise $34bn-$36bn from the capital markets in 2021

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a 3-year global benchmark bond worth $4 billion and a 7-year global benchmark bond worth $1.5 billion, proceeds of which will be part of ADB’s ordinary capital resources.

“We are delighted with the strong support from our investors across regions in our dual tranche 3- and 7-year outing,” said ADB Treasurer Pierre Van Peteghem. “With an orderbook of over $12 billion, we raised over $5 billion across the two maturities. Once again, this provides us with additional resources to assist our developing member countries in Asia and the Pacific.”

ADB plans to raise $34 billion-$36 billion from the capital markets in 2021.

The 3-year bond, with a coupon rate of 0.375% per annum payable semi-annually and a maturity date of 11 June 2024, was priced at 99.94% to yield 9.75 basis points over the 0.25% United States (US) Treasury notes due May 2024.

The 7-year bond, with a coupon rate of 1.25% per annum payable semi-annually and a maturity date of 9 June 2028, was priced at 99.414% to yield 8.8 basis points over the 1.25% US Treasury notes due May 2028.

The transaction was lead-managed by Barclays, Citi, JP Morgan, and TD Securities. A syndicate group was also formed consisting of CIBC, Daiwa, ING, and Scotiabank.

Both tranches achieved wide primary market distribution. On the 3-year issue, 22% of the bonds were placed in Asia; 35% in Europe, Middle East, and Africa; and 43% in the Americas. By investor type, 51% of the bonds went to central banks and official institutions, 32% to banks, and 17% to fund managers and other types of investors. On the 7-year issue, 42% of the bonds were placed in Asia; 42% in Europe, Middle East, and Africa; and 16% in the Americas. By investor type, 67% of the bonds went to central banks and official institutions, 18% to banks, and 15% to fund managers and other types of investors.