ADB raises USD217 million from a new issue of offshore Indian rupee-linked 5 year bonds

“Today’s fundraising represents ADB's largest single offshore Indian rupee bond issue to date,” said ADB Treasurer Pierre Van Peteghem. “We have been working hard with banks and investors to promote demand for ADB’s local currency bond issues, and the traction we received on this occasion bears testament to our progress in this respect.”

The bond issue was launched in London as an Rs5 billion transaction, increased to INR10 billion in New York and closed at INR14 billion after accommodating Asian investors. The notes carry a semi-annual coupon of 5.90% and mature in December 2022.

The bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by HSBC and TD Securities. The final order book was almost three times the size envisaged at launch, with 84% of the bonds placed with fund managers and 16% with banks. Investors participated from all time zones, with Asia accounting for 4%, Americas 55%, and Europe 41%.

Proceeds from the bonds will be mobilized to support ADB lending in India. ADB’s increased activity in the rupee capital markets is proving catalytic to the institution’s local currency lending program, which has been identified as a strategic growth area in partnership with the Government of India.

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 USD30 billion from the capital markets in 2017./.