ADB Issues $169 Million Long Dated Rupee-Linked Bond

The Asian Development Bank (ADB) has raised 11 billion Indian rupees (Rs), about $169 million, from a new issue of offshore Indian rupee-linked bonds. The transaction was structured as a tap issue into ADB's 10-year bond originally issued in October 2016, raising the outstanding amount to Rs20 billion or $308 millionthe largest local currency bond issued to date by ADB for on-lending purposes in the same currency.

ADB's commitment to regular bond issuance in the offshore Indian rupee market has galvanized demand from high caliber investors across all regions, said ADB Treasurer Pierre Van Peteghem. Traction with investors allows ADB to raise larger amounts for longer maturities at attractive pricing and acts as a catalyst for the institution's local currency lending.

 

The new issue taps into ADB's longest outstanding offshore Indian rupee bond, bearing a semi-annual coupon of 6.20% and priced to yield 6.00%.

The bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by Citibank and TD Securities. Mandated at Rs5 billion, the order book was heavily oversubscribed with the final issue size increased to Rs11 billion. Some 81% of the bonds were placed in Asia and 19% in Americas. By investor type, 100% of the bonds were placed with official institutions and fund managers.

Proceeds from the bonds will be mobilized to support ADB lending in India. India is ADB's fourth largest shareholder and is its largest borrower. In 2016, ADB approved $795 million in private sector projects in India, its largest market.

ADB is a regular borrower in the mainstream international bond markets but has also led issuance in developing Asian countries as part of efforts to promote domestic bond markets as an alternative to bank lending. ADB has raised more than $25 billion from the capital markets in 2017.

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