ADB raises $100 M from sale of maiden peso bonds
Published Feb 8, 2019 12:00 am
The Asian Development Bank (ADB) has raised P5.2204 billion ($100 million) from a new issue of local currency bonds in the international market.
ADB issued bonds in the Philippine domestic capital market in 2005 and 2007 but yesterday’s issue is the first time it has mobilized Philippine peso funding from international investors through a currency-linked structure. Currency-linked bonds are denominated in the local currency but settled in US dollars.
The bonds pay a fixed interest rate of 5.25% and have a final maturity of 4 years.
The proceeds of the bonds will support ADB’s growing local currency operations in the Philippines and help to reduce foreign exchange risk for ADB’s borrowers.
“ADB is delighted to support the capital markets in the Philippines where ADB is based,” said ADB Treasurer Mr. Pierre Van Peteghem. “Our program to issue local currency bonds in ADB member countries has been very successful. We hope that the Philippines can become a cornerstone of this program moving forward.”
The bonds were fully placed with institutional investors in Asia, Europe, and the Americas. JP Morgan acted as sole lead manager.
ADB is a regular borrower in mainstream international bond markets but has also led issuance in developing Asian countries as part of efforts to promote domestic bond markets as an alternative to bank lending. Overall, ADB raised more than $23.5 billion from the capital markets in 2018. In January, ADB issued its first domestic bonds in Kazakhstan tenge.
ADB issued bonds in the Philippine domestic capital market in 2005 and 2007 but yesterday’s issue is the first time it has mobilized Philippine peso funding from international investors through a currency-linked structure. Currency-linked bonds are denominated in the local currency but settled in US dollars.
The bonds pay a fixed interest rate of 5.25% and have a final maturity of 4 years.
The proceeds of the bonds will support ADB’s growing local currency operations in the Philippines and help to reduce foreign exchange risk for ADB’s borrowers.
“ADB is delighted to support the capital markets in the Philippines where ADB is based,” said ADB Treasurer Mr. Pierre Van Peteghem. “Our program to issue local currency bonds in ADB member countries has been very successful. We hope that the Philippines can become a cornerstone of this program moving forward.”
The bonds were fully placed with institutional investors in Asia, Europe, and the Americas. JP Morgan acted as sole lead manager.
ADB is a regular borrower in mainstream international bond markets but has also led issuance in developing Asian countries as part of efforts to promote domestic bond markets as an alternative to bank lending. Overall, ADB raised more than $23.5 billion from the capital markets in 2018. In January, ADB issued its first domestic bonds in Kazakhstan tenge.