MANILA -- The Asian Development Bank (ADB) has raised PHP5.2204 billion (USD100 million) from a new issue of local currency bonds in the international market.
In a statement Friday, the ADB issued bonds in the Philippine domestic capital market in 2005 and 2007 but the day’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 percent and have a final maturity of four years.
The proceeds of the bonds will support ADB’s growing local currency operations in the Philippines and help reduce foreign exchange risk for ADB’s borrowers.
“ADB is delighted to support the capital markets in the Philippines where ADB is based,” ADB Treasurer Pierre Van Peteghem was quoted in the statement.
“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,” he said.
The bonds were fully placed with institutional investors in Asia, Europe, and the Americas. JP Morgan acted as sole lead manager.
The ADB is a regular borrower in mainstream international bond markets but has also led issuances in developing Asian countries as part of its efforts to promote domestic bond markets as an alternative to bank lending.
Overall, ADB raised more than USD23.5 billion from the capital markets in 2018. In January, ADB issued its first domestic bonds in Kazakhstan tenge. (PR)
