NDB nets $1.5 bln for BRICS coronavirus response

NDB nets $1.5 bln for BRICS coronavirus response

Asset Management Bonds Debt Capital Markets Fixed Income Funds Latin America Brazil Coronavirus

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The Shanghai-based New Development Bank (NDB) sold on Tuesday $1.5 billion worth of three-year bonds with more than $2.1 billion in orders, a source familiar with the deal told LatinFinance.

NDB priced the new 2023 notes at 99.896 with a coupon of 0.625%, the source said.

The joint lead managers were HSBC, Citi, Crédit Agricole, Goldman Sachs and JPMorgan.

The deal started with initial price talk in the 40 to 45 basis points area over mid-swaps. With indications of interest reaching $1.5 billion, books opened at 40 basis points over mid-swaps. The bank finally launched $1.5 billion with a spread of 38 basis points over mid-swaps, the source said.

Proceeds from this transaction will be used to finance responses to the COVID-19 pandemic in the bank's five member nations: Brazil, Russia, India, China and South Africa.

S&P Global affirmed the bank's AA+ credit rating with a stable outlook in February 2020. The rating reflects the bank’s sound governance and strong financial risk profile, the ratings agency said. Fitch Rating last affirmed NDB's AA+ long-term credit rating with a stable outlook in July, 2019.

On April 2, NDB issued CNY5 billion ($705 million) worth of "coronavirus combating bonds" with a 2.43% coupon in a transaction that was more than three times oversubscribed, the bank said.

NDB said it targets the provision of up to $10 billion in coronavirus-related assistance to its member countries, including health and social safety expenditures and support in economic recovery. In March, the bank lent China CNY7 billion for public health, and in April it gave India $1 billion for the same purpose.

NDB elected Brazilian economist Marcos Troyjo in late May as its new president for the next five years.

In October, the bank lent Brazil $500 million to fund public transit, waste treatment and renewable energy projects. It also lent $200 million to Brazil's state-owned energy company Petrobras to renovate two refineries in May 2018.