IDB raises another $4 bln for coronavirus response

IDB raises another $4 bln for coronavirus response

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The Inter-American Development Bank (IDB) said Tuesday that it sold $4 billion worth of five-year bonds in US dollars after the orderbook closed with more than $5.75 billion.

"The orderbook is the largest ever for a five-year IDB transaction," said Laura Fan, head of funding at the development bank. "We also had the largest number of investors ever for any IDB bond issue."

IDB received orders from 117 investors with 42.2% from the Americas, 34.4% from Asia Pacific and 23.4% from Europe, the Middle East and Africa. Central banks and other official institutions bought 50.2% of the notes on offer, while commercial banks acquired 32.5%, asset managers 14.9% and pension funds and insurance companies 2.4%, the bank said.

The joint lead managers BMO, Goldman Sachs, Morgan Stanley and Nomura put the coupon on the new 2025 notes at 0.625% and priced them at 99.97 to yield 0.631%, equal to 17 basis points over mid-swaps or 22.4 basis points over 0.25% US Treasury notes due 2025, the bank said in a press release.

The deal started on Monday with initial price talk at 21 basis points over mid-swaps, and indications of interest stood at more than $4.5 billion before the market opened in London on Tuesday. The price tightened to 19 basis points over mid-swaps as the order book grew to $6 billion. The bank finally launched $4 billion at 17 basis points over mid-swaps, and orders came down to $5.75 billion, Fan said.

The transaction is IDB's fourth benchmark-sized bond sale in dollars to raise money for a $12 billion lending program to deal with the health and economic crisis from the COVID-19 pandemic.