New Development Bank prices USD 2 billion benchmark bond to further support COVID emergency response

• The New Development Bank's (NDB) latest issue in the international capital markets represents another strong step forward in developing its yield curve.
• The USD-denominated 5-year COVID Response Bond is yet another demonstration of NDB's commitment to fighting the coronavirus outbreak in its member-countries.
• This transaction continues to broaden NDB's high-quality investor base, with continued strong participation from central banks and official institutions, allowing for 3 basis points spread tightening.

SHANGHAI, Sept. 24, 2020 /PRNewswire/ -- On September 22, 2020, the New Development Bank (NDB) priced its USD 2 billion, 5-year COVID Response Bond in the international capital markets, following its inaugural issuance on June 16, 2020. This is the NDB's largest-ever USD benchmark bond to date.

The net proceeds of the bond issuance will be used to finance sustainable development activities in the Bank's member countries, including COVID-related emergency assistance programs. NDB is targeting to provide up to USD 10 billion in crisis-related assistance, including financing healthcare and social safety-related expenditures, as well as supporting economic recovery efforts. NDB has approved USD 4 billion of COVID-19 related emergency assistance projects to date.

The transaction marks NDB's second foray into the international capital markets following a highly successful inaugural benchmark issuance. The transaction garnered notable demand from a geographically diverse investor base, and substantial participation from central banks and official institutions, which accounted for 66% of final allocations. The geographic distribution of investors of the final bond book was: Asia – 57%, EMEA – 34%, Americas – 9%.

The 5-year benchmark bond was issued at a spread of 37 bps over mid-swaps and pays a fixed annual coupon of 0.625%. Bank of China, Barclays, Citi, Goldman Sachs International and Standard Chartered Bank are acting as lead managers of the bond issuance.

"We are grateful for the enthusiastic response from investors to our second benchmark transaction which supports NDB's fight against the COVID-19 outbreak in our member countries. The transaction resonated well with investors and led to an extremely high-quality book, which saw a significant contribution from central banks and official institutions," said Mr. Leslie Maasdorp, NDB Vice President and Chief Financial Officer. "I would like to express my appreciation to investors for their continued support for NDB and our sustainable development mandate. It allows us to work together with our member countries to respond to the adverse public health and economic challenges caused by the pandemic."