ADB returns to Indian Bond Market

News Hour:

Taking advantage of strong investor demand and supportive market conditions, the Asian Development Bank has raised 7 billion Indian Rupees (INR), about $104 million, from a new issue of offshore Indian Rupee-linked bonds, via a tap into the 5 year bond issued in July 2016. This represents ADB’s fourth bond issue in the offshore INR-linked market, and the third issue year-to-date.

“Today’s bond issue represents ADB’s largest Indian Rupee bond issue to date,” said ADB Treasurer Pierre Van Peteghem. “By tapping into emerging local currency markets, ADB is sending a clear sign to investors of our commitment to creating liquid benchmarks in capital markets in developing Asia.”

The issue increases the outstanding deal size of the ADB 6.45% notes due August 2021 to INR 12 billion (about $179 million). The bonds were priced to yield 6.33%, a premium of 0.12% to the original issue.

The bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by JP Morgan acting as Sole Lead Manager. 47% of the bonds were placed in Asia and 53% in Europe, Middle East, and Africa. By investor type, 44% of the bonds were placed with banks, and 56% with fund managers.

Proceeds from the bonds will be mobilized to support private sector lending in the Indian market. India is ADB’s fourth largest shareholder and is its largest borrower, excluding co-financing. In 2015, ADB approved $836 million in private sector projects in India, its largest market.

ADB is a regular borrower in the 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. ADB plans to raise around $20 billion from the capital markets in 2016.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in Asia. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including co-financing of $10.7 billion.

This article has been posted by a News Hour Correspondent. For queries, please contact through [email protected]
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