ADB prices 2nd issue of Panda bonds in China
The Asian Development Bank (ADB) on Friday said it has priced its second issue of one billion yuan renminbi-denominated bonds, or Panda bonds, in China's domestic capital market.
Priced at par, the bonds carry an annual coupon of 4.2 percent per annum and have a maturity date of Dec. 8, 2019, the Philippines-based multilateral development lender said in a press release.
Offered through a book-building process, the issuance achieved a broad distribution with up to 50 percent of the bonds placed with domestic banks, 15 percent with foreign banks, and 35 percent with insurance companies, it said.
The bonds will be traded in the interbank market with clearing and settlement through The China Government Securities Depository Trust and Clearing Co., Ltd. China International Capital Corporation Limited (CICC) is the sole lead manager of the bonds.
ADB said it will use the proceeds of the Panda bonds to fund private sector clean energy and energy efficiency projects in China. The objective is to help reduce currency mismatches for borrowers that have no foreign exchange earnings.
ADB issued its first Panda bonds of one billion yuan in 2005.
"ADB is extremely pleased to have come back to the PRC bond market after the successful issuance of our landmark Panda Bonds in 2005," said ADB Vice-President Bindu Lohani. "We are honored to have been one of the first multilateral institutions to have issued RMB bonds in the PRC and contribute to the further development of the PRC bond market."
Wei Ding, Managing Director and Head of Investment Banking, said the Panda bonds can bring in a welcome diversification for Chinese domestic investors and the transaction will serve as an excellent benchmark for other international issuers.
ADB said it aims to pursue its local currency bond issuances in other Asian markets particularly in those developing member countries where bond proceeds can either be swapped into one of ADB's operating currencies or be retained to finance ADB projects that require local currency financing.