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

The Asian Development Bank (ADB) has returned to the US dollar bond market with the pricing of a two-year global bond with a principal amount of 4.5 billion dollars, proceeds of which will be part of ADB's ordinary capital resources.

"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 order book being over seven billion dollars while still tightening the pricing from initial guidance by five basis points," he said in a statement.

The bond with a coupon rate of 0.625 per cent per annum payable semi-annually and a maturity date of April 7, 2022 was priced at 99.909 per cent to yield 45.3 basis points over the 0.375 per cent 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 per cent of the bonds placed in the Americas, 32 per cent in Europe, the Middle East and Africa, and 27 per cent in Asia.

By investor type, 55 per cent of the bonds went to central banks and official institutions, 25 per cent to banks and 20 per cent to fund managers and other types of investors.

ADB plans to raise around 25 billion dollars from the capital markets in 2020.