ADB Sells Dual-Tranche $3 Billion 3-Year and $1 Billion 10-Year Global Benchmark Bonds

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a dual-tranche $3 billion 3-year and $1 billion 10-year global benchmark bond issues, proceeds of which will be part of ADB's ordinary capital resources.

The first week of January has traditionally been an extremely busy issuance period with clear first-mover advantages and New Year cash flows we were keen to capitalize on. As the supply picture unfolded, there was a clear window to navigate the building pipeline with a maturity differentiating 3/10-year dual-tranche transaction. This format allows us to respond to demand in the front and back-end of the curve and I am pleased to see the solid investor response for ADB's credit and support of its mission in the region, said ADB Treasurer Pierre Van Peteghem.

 

The 3-year bond, with a coupon rate of 1.750% per annum payable semi-annually and a maturity date of 10 January 2020, was priced at 99.942% to yield 28.05 basis points over the 1.375% US Treasury notes due December 2019. The 10-year bond, with a coupon rate of 2.625% per annum payable semi-annually and a maturity date of 12 January 2027, was priced at 99.451% to yield 23.75 basis points over the 2.000% US Treasury notes due November 2026.

The transactions were lead-managed by Citi, Goldman Sachs, J.P. Morgan, and Nomura. A syndicate group was also formed consisting of Bank of America Merrill Lynch, BMO Capital Markets, BNP Paribas, Credit Agricole CIB, Daiwa Securities, DBS Bank, Mizuho International, RBC Capital Markets, SMBC Nikko, and TD Securities.

Both issues achieved wide primary market distribution with 40% of the 3-year bonds placed in Asia, 29% in Europe, Middle East, and Africa, and 31% in the Americas. By investor type, 72% of the bonds went to central banks and official institutions, 8% to banks, and 20% to fund managers and other types of investors. For the 10-year bonds, 27% were placed in Asia, 20% in Europe, Middle East and Africa, and 53% in the Americas. By investor type, 47% of the bonds went to central banks and official institutions, 11% to banks, 42% to fund managers and other types of investors.

ADB plans to raise around $25-30 billion from the capital markets in 2017.

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