ADB sells dual-tranche $2.25 billion 3-year and $2 billion 10-year global benchmark bonds

The Asian Development Bank (ADB) has returned to the US dollar bond market with the pricing of a three-year global benchmark bond worth 2.25 billion dollars and a 10-year global benchmark bond worth two billion dollars, proceeds of which will be part of ADB's ordinary capital resources.

ADB plans to raise about 25 billion dollars from the capital markets in 2020. "The dollar market has seen a very active start to the new year. ADB is very pleased to make its first outing a strong one," said ADB Treasurer Pierre Van Peteghem.

"The dual three-year and 10-year tranche approach allowed ADB to respond to investor demand on both ends of the maturity spectrum as reflected in the final order book being over 6.5 billion dollars," he said in a statement on Thursday.

 

"It is also noteworthy that this 10-year transaction opened the market for supranationals in that tenor and equalled ADB's largest 10-year transaction to date," added Peteghem.

The three-year bond with a coupon rate of 1.625 per cent per annum payable semi-annually and a maturity date of January 24, 2023 was priced at 99.953 per cent to yield 7.7 basis points over the 1.5 per cent US Treasury notes due in January 2023.

The 10-year bond with a coupon rate of 1.875 per cent per annum payable semi-annually and a maturity date of January 24, 2030 was priced at 99.61 per cent to yield 13.25 basis points over the 1.75 per cent US Treasury notes due in November 2029.

The transaction was lead-managed by Barclays, JP Morgan, Nomura and RBC Capital Markets. A syndicate group was also formed consisting of ANZ, Commerzbank, ING, Credit Agricole and Natwest Markets.

Both issues achieved wide primary market distribution with 37 per cent of the three-year bonds placed in Asia, 37 per cent in the Americas, and 26 per cent in Europe, Middle East and Africa.

By investor type, 51 per cent of the bonds went to central banks and official institutions, 35 per cent to banks, and 14 per cent to fund managers and other types of investors.

For the 10-year bonds, 55 per cent were placed in Europe, Middle East and Africa, 31 per cent in Asia and 14 per cent in the Americas.

By investor type, 36 per cent of the bonds went to central banks and official institutions, 44 per cent to banks, 20 per cent to fund managers and other types of investors.

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