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NDB's US$1.5 billion bond targets sustainability, Covid relief
Brics bank’s oversubscribed offering aims to finance emergency loans in member countries
22 Apr 2021 | The Asset

Multilateral lender New Development Bank (NDB), on April 20, priced a US$1.5 billion, five-year benchmark sustainability-focused bond, its first US dollar benchmark bond in 2021 and its third in the US dollar market to date, attracting a high-quality order book that allowed pricing to tighten by 2 basis points (bp) in the book-building process.

Bond proceeds will be used to finance sustainable development activities and provide emergency support loans, including Covid-19-pandemic related emergency assistance programmes, to the bank’s member countries – Brazil, Russia, India, China and South Africa (Brics).

The bank is targeting to provide up to US$10 billion in crisis-related assistance, including financing healthcare and social safety-related expenditures, as well as supporting economic recovery efforts. The bank has approved US$9 billion of Covid-19-related emergency assistance projects to  date.

The transaction extends NDB's current outstanding US dollar curve and marks a successful return to the US dollar market by the bank to the five-year maturity area. The transaction was met with significant support from NDB's global investor base, which topped over 50 orders.

The final book’s geographic distribution of investors was Asia (36%), Europe, the Middle East and Africa (60%), and Americas (4%). The orderbook was well-diversified by investor type – central banks/official institutions (78%), banks (16%), asset managers (4%), private banks (1%), and others (1%).

The five-year benchmark bond was issued at a spread of 25bp over mid-swaps and pays a fixed annual coupon of 1.125%. Citi, HSBC, ICBC, JP Morgan, Standard Chartered Bank and TD Securities were the lead managers of the bond issuance.

Leslie Maasdorp, NDB vice-president and chief financial officer, notes:  “NDB solidified its position as a regular SSA [sovereigns, supranationals and agencies] issuer in the international capital markets, attracting a diversified and high-quality investor base, including more than 20 new investors with this transaction.”

Treasury & Capital Markets
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