The Asian Development Bank has raised 9 billion Indian Rupees (INR), about $135 million, from a new issue of offshore Indian Rupee-linked 10 year bonds. This represents ADB’s fifth bond issue in the offshore INR-linked market, and the fourth issue year-to-date.
“Today’s bond issue represents ADB’s longest offshore Indian Rupee bond issue to date,” said ADB Treasurer Pierre Van Peteghem. “Our aim is to establish yield curves with liquid benchmarks in the capital markets of developing Asia, while raising local currency funding to satisfy the increasing demand for local currency loans.”
The issue sets a new benchmark in the ten year offshore INR market, with the bonds bearing a semi-annual coupon of 6.20% and priced to yield 6.23%.
The bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by JP Morgan and TD Securities. Mandated at INR 5bn, the order book was heavily over-subscribed with the final issue size increased to INR 9bn. 1% of the bonds were placed in Asia, 21% in Americas and 78% in Europe, Middle East, and Africa. By investor type, 58% of the bonds were placed with banks and 42% with fund managers.
Proceeds from the bonds will be mobilized to support ADB 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.
