The New Development Bank (NDB), a multilateral lender established by Brazil, India, Russia, China and South Africa, priced on September 22 a US$2 billion offering in another fund raising that demonstrates its commitment to fighting the Covid-19 pandemic in its member countries. This is NDB’s second foray in the international debt capital markets, following its maiden offering in June amounting to US$1.5 billion for three years, which was also earmarked to support the fight against the coronavirus outbreak.
The Reg S five-year deal was priced at 99.651% with a coupon of 0.625% to offer a yield of 0.695%. This was equivalent to a spread of 37 basis points over mid-swap. At this level, the issuance achieved a flat yield and spread to the outstanding three-year bond.
NDB is targeting to provide up to US$10 billion in support for economic recovery efforts and crisis-related assistance, including financing healthcare and social safety-related expenditures. The bank has approved US$4 billion of Covid-19-related emergency assistance projects to date.
Leslie Maasdorp, NDB’s vice president and CFO, notes the offering resonated well with investors, who continued to support its sustainable development mandate, and led to a high-quality orderbook. “It allows us to work together with our member countries to respond to the adverse public health and economic challenges caused by the pandemic,” he adds.
The transaction broadens NDB’s investor base as it garnered notable demand with an orderbook of US$2.4 billion from geographically diverse accounts. It attracted significant participation from central banks and official institutions, which accounted for 66% of the final allocation. In terms of geographic distribution, 57% of the bond was sold in Asia, 34% in the Middle East, Europe and Africa, and 9% in the Americas.
Bank of China, Barclays, Citi, Goldman Sachs and Standard Chartered were the lead managers for the transaction, while China Construction Bank, Industrial and Commercial Bank of China, HSBC, Nomura, TD Securities, and Royal Bank of Canada acted as co-managers.