Asian Development Bank (ADB) has raised over USD 307 Million(~ INR 2232 Crore or Chinese Yuan Renminbi┬а(CNY) 2 billion) from the 1st Panda bond issue in more than a decade.This is ADBтАЩs largest-ever borrowing in an Asian local currency.
- It is the first borrowing of ADB from a CNY10 billion program approved by regulator National Association of Financial Market Institutional Investors in June 2020.
Objective тАУ It will support ADB for their development project in china during its 5 year country partnership strategy.
What is the Panda Bond?
A┬аPanda bond is a Chinese Currency (renminbi) denominated bond from a non-Chinese issuer, sold in China.
Before selling such bonds, the Chinese government agreed that funds raised from sales of Panda bonds would have to remain in China; issuers would not be permitted to repatriate such funds.
About the Panda Bond:
Bond Pays Annual Coupon – 3.20%
Maturity – 5-year Bullet Maturity.It will redeem in March 2026.
Issuance of Bond:
The issuance of bond 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.
Key Points:
i.The Proceeding of this bond will be built on the capital resources of the ADB & it will be deployed to support ADBтАЩs local currency operations in Chinese renminbi.
ii.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.
iii.It was priced 21 basis points below the corresponding China Development Bank bond reference yield and 9 basis points above Chinese government bonds.
Background:
Earlier, ADB has 1st issued CNY1 billion, in 2005 & again had issued CNY 1 billion again in 2009.After that ADB has issues almost CNY 10 billion of offshore Dim Sum bonds.
Recent Related News:
i.On December 8, 2020, ADB approved USD 300 million (about Rs 2,200 crore) loan for Strengthening Comprehensive Primary Health Care in Urban Areas Program in India.
About Asian Development Bank (ADB)
President – Masatsugu Asakawa
Headquarter тАУ Metro Manila, Philippines
Members – 68 membersтАФ49 from the region.
