Bank of China (BOC) has served as lead underwriter for the Asian Development Bank’s (ADB) second panda bond issue since the start of 2021.
ADB raised one billion yuan via an issue of 5-year panda bonds on China’s interbank bond market on 24 November.
The instruments have a coupon rate of 2.78%, marking a new low for 5-year panda bonds issued in the past several years. The pricing is 6 basis points above Chinese government bonds, as well as 20 basis points below the corresponding China Development Bank bond reference yield.
Offshore institutional investors showed strong interest in the issue, accounting for 57% of orders.
Proceeds from the issue will be used by ADB to expand its ordinary capital resources, as well as to support ADB’s local currency operations in the renminbi.
“Access to domestic capital markets is the key to unlocking liquidity,” said ADB Treasurer Pierre Van Peteghem. “The China Inter-Bank Bond Market is among the deepest and most liquid in the world. Reconnecting with Panda bond investors has been an absolute success story for ADB.”
ADB issued a 2 billion yuan 5-year bond in March of this year.