ADB sells $4.5b two-year global bonds in largest-ever single tranche outing

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MANILA, PHILIPPINES:  The Asian Development Bank (ADB) returned to the US dollar bond market on March 31 with the pricing of a two-year global bond with principal amount of $4.5 billion, proceeds of which will be part of ADB’s ordinary capital resources, said a press release issued on Wednesday. .

“ADB is delighted to be able to show its strength in the capital markets through these very challenging times. This issue, the largest single tranche issuance in ADB’s history, enhances ADB’s liquidity to respond to Asia’s development needs during and beyond this COVID-19 crisis,” said ADB Treasurer Pierre Van Peteghem. “Targeting the two-year point on the curve allows ADB to respond to deep investor demand as reflected in the final orderbook being over $7 billion, while still tightening the pricing from initial guidance by 5 basis points.”   

The bond, with a coupon rate of 0.625% per annum payable semi-annually and a maturity date of  April 7, 2022, was priced at 99.909% to yield 45.3 basis points over the 0.375% US Treasury notes due March 2022. The transaction was lead-managed by Goldman Sachs International, Morgan Stanley, and RBC Capital Markets.

The issue achieved wide primary market distribution with 41% of the bonds placed in the Americas; 32% in Europe, Middle East, and Africa; and 27% in Asia. By investor type, 55% of the bonds went to central banks and official institutions, 25% to banks, and 20% to fund managers and other types of investors. The ADB plans to raise around $25 billion from the capital markets in 2020.

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