ADB issues $3.25bn global benchmark bond

7 Jan 16

The Asian Development Bank has returned to the US dollar bond market with a $3.25bn three-year global benchmark bond – its largest-ever global benchmark transaction to date.

Benchmark bonds are used as a standard to compare the performance of other bonds with the same maturity, similar issue size and liquidity.

The ADB, which expects to raise around $20bn from the capital markets over 2016, announced the bond’s issuance today and said its proceeds will be part of the bank’s ordinary capital resources and used in its non-concessional operations.

ADB treasurer Pierre Van Peteghem said there is a high level of oversubscription in the order book already, with investor interest in excess of $4bn.

He said the bank was pleased with such a “fantastic outcome”, something that was “testament to the institution’s robust credit fundamentals and loyal global following in the capital markets”.

The issue achieved wide primary market distribution, with 35% of bonds placed in Asia, 34% in Europe, the Middle East and Africa and 31% in the Americas.

In terms of investor type, 68% of the bonds went to central banks and official institutions, 20% to banks and 12% to fund managers and other types of investors.

The three-year bond, which matures in January 2019, has a coupon rate of 1.375% payable semi-annually every year and was managed primarily by Bank of America Merrill Lynch, HSBC, Morgan Stanley and TD Securities.

A syndicate group consisting of 12 other financial institutions, including BNP Paribas, Citi, Credit Suisse and Deutsche Bank, was also formed. 

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