ADB’s largest bond is structured as a 4-year currency-linked instrument with a one-time repayment at maturity and a fixed annual interest rate of 6.72%.
The Asian Development Bank reported successfully selling its largest Indian currency green bond, which raised Rs 1,250 crore (about USD 150 million). According to the ADB’s official announcement, the bond is structured as a four-year currency-linked instrument with a once-only payout at maturity and an annualised interest rate of 6.72%.
Popularly referred to as masala bonds, they are priced in Indian rupees but settled in US dollars, with yields linked to the performance of the Indian currency.
The proceeds from this green bond will fund ADB’s private sector renewable energy and green finance projects, which coincide with the organisation’s aims of combating climate change, strengthening resilience to climate and disasters, and improving environmental sustainability.
ADB Treasurer Pierre Van Peteghem emphasised the importance of sustainability in international financial markets, citing the bank’s long history as a frequent issuer of green bonds.
He described the potential to fund climate change initiatives with country-specific currency green bonds as a pinnacle achievement that will help expand capital markets.
Standard Chartered Bank arranged the bond listed on the Luxembourg Stock Exchange, and a group of UK and US investors subscribed to it.
Investors were drawn to the benchmark size of a local currency bond with a green theme backed by a multilateral development bank.
ADB, an active participant in the Indian rupee bond market since 2004, returned with this issuance after a three-year absence.
Since 2014, the bank has routinely raised cash through masala bond issuance, totalling more than USD 1 billion. As it works to eradicate extreme poverty, the Asian Development Bank remains committed to promoting a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.
ADB was established in 1966 and is owned by 68 members, 49 of whom are from the region.