ADB raises $5bln via dual bonds in Philippines

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The Asian Development Bank (ADB) has raised $5 billion via a dual bond issuance to bankroll initiatives to promote social and economic development in Asia and the Pacific.

The multilateral lender raised $3 billion from a three-year global benchmark US dollar bond and another $2 billion from a 10-year global benchmark US dollar bond.

The proceeds of the fund raising activity would be part of the multilateral lender's ordinary capital resources, which is where most of its lending comes from.

This is ADB's first global benchmark bond issue for 2024 as it plans to raise between $30 billion and $34 billion from capital markets this year.

'This provides us with additional resources as we actively support our developing member countries in our evolving mission to address challenges confronting Asia and the Pacific,' ADB treasurer Pierre Van Peteghem said.

The three-year bond has a coupon rate of 4.125 percent per annum payable semi-annually and a maturity date of Jan.12, 2027. It was priced at 99.663 percent to yield 11.9 basis points over the 4.375 percent US Treasury notes due December 2026.

Meanwhile, the 10-year bond, which has a coupon rate of 4.125 percent per annum payable semi-annually and a maturity date of Jan. 12, 2034, was priced at 99.530 percent to yield 21.3 basis points over the 4.5 percent US Treasury notes due November 2033.

BofA Securities, Morgan Stanley, RBC Capital Markets and TD Securities served as lead managers.

A syndicate group consisting of CIBC Capital Markets, Daiwa Capital Markets Europe, NatWest Markets, Scotiabank, and Standard Chartered Bank, was also formed for the transaction.

The bond issue achieved wide primary market distribution.

On the three-year issue in particular, 36 percent of the bonds were placed in Europe, the Middle East, and Africa; 33 percent in Asia; and 31 percent in the Americas.

In terms of investors, 66 percent went to central banks and official institutions and 21 percent to banks. The remaining 13 percent went to fund managers and other types of investors.

For the 10-year issue, 54 percent of the bonds were placed in Europe, the Middle East, and Africa;, 29 percent in the Americas and 17 percent in Asia.

By investor type, banks got 50 percent of the 10-year issue bonds, while 28 percent went to central banks and official institutions, and 22 percent to fund managers and other types of investors.