ADB returns to US dollar bond market with $3 billion 5-year global bond

“Market conditions have been volatile these past few months with rates marching steadily downward and swap spreads nearing their historical lows,” said ADB Treasurer Mr. Pierre Van Peteghem.

The Asian Development Bank (ADB) returned to the US dollar bond market with the pricing of a $3 billion 5-year global benchmark bond issue, proceeds of which will be part of ADB’s ordinary capital resources.

“Market conditions have been volatile these past few months with rates marching steadily downward and swap spreads nearing their historical lows,” said ADB Treasurer Mr. Pierre Van Peteghem. “Following the pop-up in swap spreads, we saw a window to bring ADB’s last global benchmark of 2019 in the 5-year part of the curve adding to the existing 3-year, 5-year, and 10-year lines issued earlier on. The engagement from our investor base was typically strong and we are proud to be able to end the year on a high note.”  

The 5-year bond, with a coupon rate of 1.500% per annum payable semi-annually and a maturity date of 18 October 2024, was priced at 99.722% to yield 11.4 basis points over the 1.500% US Treasury notes due September 2024.

The transaction was lead-managed by Bank of America Merrill Lynch, Citi, Daiwa Capital Markets Europe Limited, and HSBC Bank plc. A syndicate group was also formed consisting of Commerzbank, Danske Bank, DNB Bank, Nordea Bank, and Wells Fargo Securities.  

With around 65 investors taking part, the issue achieved wide primary market distribution with 34% of the bonds placed in Asia; 42% in Europe, the Middle East, and Africa; and 24% in the Americas. By investor type, 58% of the bonds went to central banks and official institutions, 32% to banks, and 10% to fund managers and other types of investors.  

ADB plans to raise around $24 billion from the capital markets in 2019.