ADB has returned to the US dollar global bond market with a
US$1 billion 10-year Global benchmark bond issue.
The issue was conducted via Lead Managers Citigroup, Daiwa
SMBC, and UBS. A syndicate group was formed with CSFB, Goldman
Sachs, HSBC, JP Morgan, Morgan Stanley, and Nomura
International as Co-lead managers.
The bonds, with a coupon rate of 4.25% per annum payable
semiannually and maturity date of 20 October 2014, were priced
at 99.252% to yield 23 basis points over the 4.250% US Treasury
due August 2014.
The deal marks ADB's first in the US dollar global bond
market since January 2003, when it launched its highly
successful US$1 billion 2.375% Global Bonds due 15 March
"The transaction reflects ADB's core funding strategy of
maintaining a strong presence in key currency bond markets
through regular issuance of liquid benchmark global bonds,"
says Mikio Kashiwagi, ADB Treasurer.
With volatility in the Treasury market continuing since the
beginning of the year, issuance opportunities in the 10-year
sector have been infrequent. However, the demand has been very
strong when the market direction is right.
With the recent sell off in the Treasury market followed by
a market friendly US payroll report on Friday, investors have
felt the need to add to the duration of their portfolios making
the 10-year sector very attractive. In addition, issuance in
the supranational sector has been relatively light over recent
months, while the demand for safe, stable instruments from top
quality names has been high.
This favorable backdrop, combined with extensive roadshows
across Asia and the United States prior to launch, contributed
to an oversubscribed book, with about US$1.2 billion of orders
As with previous benchmark transactions, the issue achieved
broad primary market distribution with 45% of the bonds placed
in non-Japan Asia, 21% in Japan, 20% in the US, and 14% in
Europe. By investor types, 42% of the bonds went to Central
Banks and Government Institutions, 36% to Bank Treasuries, 18%
to Fund Managers and 4% Other.
The proceeds of the issue will be part of ADB's ordinary
capital resources and used in its non-concessional