ADB Returns to Panda Bond Market

Manila: The Asian Development Bank (ADB) today raised CNY2 billion (about $307 million) from its first Panda bond issue in more than a decade. This bond represents ADB’s largest-ever borrowing in an Asian local currency.

The bond pays a 3.20% annual coupon and features a 5-year bullet maturity, redeeming in March 2026. It represents the first borrowing from a CNY10 billion program approved by regulator National Association of Financial Market Institutional Investors in June 2020.

The offering was 1.86 times oversubscribed and widely distributed to domestic and international investors through centralized book building and auction in the China Inter-Bank Bond Market, following a comprehensive program of investor roadshows and one-on-one meetings.

The issue was arranged by lead underwriter and bookrunner Bank of China, with joint leads BNP Paribas, CITIC Securities, and HSBC Bank and a syndicate of relationship banks.

Proceeds of the bond will be added to ADB’s ordinary capital resources and deployed to support ADB’s local currency operations in Chinese renminbi. The bond was priced 21 basis points below the corresponding China Development Bank bond reference yield, and 9 basis points above Chinese government bonds.

“ADB has worked hard on our return to the Chinese domestic bond market, and is delighted with this outstanding result,” said ADB Treasurer Pierre Van Peteghem. “The availability of competitively priced local currency liquidity is critical to supporting ADB’s development projects in the People’s Republic of China (PRC), as announced in the 5-year country partnership strategy.”

In October 2005, ADB became the first issuer in the Panda bond market with a CNY1 billion, 10-year issue, and returned for a second 10-year bond with the same amount in 2009. Since then, ADB has issued nearly CNY10 billion of offshore Dim Sum bonds and has been a pioneer in adopting new financing instruments for its operations in the PRC. ADB is a regular borrower in the mainstream international bond markets, but has also led issuances in developing Asian countries as part of its efforts to promote local currency bond markets as an alternative to bank lending.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.