ADB issues $1.2B in bonds
The Asian Development Bank has sold $1.25 billion worth of bonds that attracted significant interest from global investors at a time when uncertainties in the market are dampening risk appetite.
In a statement, ADB said the proceeds of the bond offering would be used to boost its capital and support activities, besides concessional lending to member-countries.
The three-year global bonds carry an interest of 0.605 percent a year.
“We are quite pleased with the transaction and the broad interest from investors resulting in a book in excess of $1.25 billion with over 40 investors,” ADB treasurer Mikio Kashiwagi said in the statement issued Wednesday.
ADB said the bonds had attracted investors from different regions, with 52 percent of the sale being accounted for by investments from Asia; 22 percent from Europe, Middle East and Africa; and 26 percent from the Americas.
The bulk, or 63 percent, of the bond sale was accounted for by purchases made by central banks and government-owned financial institutions, which prefer highly rated securities such as those issued by developmental institutions like the ADB.
ADB is a triple-A institution.
Fund managers accounted for 20 percent of the value of the bonds sold, while private banks and other institutions accounted for 17 percent.
ADB tapped Credit Suisse, Deutsche Bank, HSBC, Nomura and a syndicate group to arrange the transactions for the bond sale. The syndicate group was composed of Bank of America Merrill Lynch, BNP Paribas, Citigroup, Daiwa, Goldman Sachs, JP Morgan, Morgan Stanley, RBC Capital Markets and UBS.
Proceeds of ADB’s latest bond sale put ADB closer to its target of raising $14 billion from capital markets this year to help finance its operations.
Just last week, ADB raised an equivalent of $339 million from sale of “Clean Energy Bonds” in the Japanese market. The sale was meant to raise funds for energy-related activities of member-countries that ADB wants to support.
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