ADB sells USD 4.5 bn bonds

The Asian Development Bank (ADB) on Wednesday said it has sold USD 4.5 billion global bonds, its largest-ever single tranche outing.

The proceeds will be part of its ordinary capital resources, it added.

ADB plans to raise around USD 25 billion from the capital markets in 2020, the Manila-headquartered multilateral agency said in a statement.

"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," ADB Treasurer Pierre Van Peteghem said.

He further said that targeting the 2-year point on the curve allows ADB to respond to deep investor demand as reflected in the final orderbook being over USD 7 billion, while still tightening the pricing from initial guidance by 5 basis points.

The bond, with a coupon rate of 0.625 per cent per annum payable semi-annually and a maturity date of April 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.

ADB further said the issue achieved wide primary market distribution with 41 per cent of the bonds placed in the Americas; 32 per cent in Europe, 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.

Established in 1966, ADB is owned by 68 members.