On July 15, 2021, the New Development Bank (NDB) priced its 3-year USD 2.25 billion Pandemic Support and Sustainable Bond. This transaction is the fourth USD benchmark bond offering of the Bank in the international markets.
The net proceeds from the Bond will be used for financing sustainable development activities and providing COVID-19 emergency support loans to the member countries of the Bank. In response to the adverse economic impact of COVID-19 pandemic, the Board of Directors of the NDB approved nine emergency support loans totaling approx. USD 9 billion, including four loans for enabling economic recovery in the member countries of the Bank. NDB targets a total of USD 10 billion in crisis-related assistance.
The transaction was met with strong demand from the global investor community. The distribution of investors of the final book was as follows, by geography: Asia – 52.9%, EMEA – 24.9%, Americas – 22.2%, and by investor type: Central Banks/Official Institutions – 78.5%, Banks – 16.5%, Corp. – 2.9%, Funds – 1.8%, Others – 0.3%.
“NDB has successfully priced a new USD 2.25 billion Pandemic Support and Sustainable Bond, which is a significant milestone for the Bank as USD is our main currency in which we fund our lending operations. We are particularly pleased to have attracted strong demand from a high quality and geographically diverse investor base. An increasing investor demand helps meet the Bank’s growing liquidity needs in light of the expansion of NDB’s lending activities,” said Mr. Leslie Maasdorp, NDB VP & CFO. “The NDB is leveraging its access to international investors to fund COVID-19 emergency response loans as well as ordinary operations. In 2020, we made four public bond issues, including the Bank’s first USD bond. In 2021, we plan to raise approximately USD 7 billion equivalent across different currencies in international and domestic capital markets, with a strong emphasis on ESG.”
Barclays, Credit Agricole CIB (B&D), Goldman Sachs International, J.P. Morgan and Standard Chartered Bank acted as joint lead managers for the transaction.
Bond Summary Terms
| Issuer | New Development Bank (NDB) |
| Issuer rating | AA+ (S&P) / AA+ (Fitch) / AAA (JCR) / AAA (ACRA) |
| Format | Reg S, Category 2 |
| Notional Amount | USD 2,250,000,000 |
| Settlement date | July 22, 2021 |
| Maturity date | July 22, 2024 |
| Coupon | 0.625% per annum |
| Denominations | USD 200k+1k |
| Listing | Regulated Market of the Irish Stock Exchange, trading as Euronext Dublin |
| Lead managers | Barclays, Credit Agricole CIB (B&D), Goldman Sachs International, J.P. Morgan and Standard Chartered Bank |
Background information
In December 2019, NDB registered its inaugural USD 50 billion Euro Medium Term Note Programme in the international capital markets. The Programme has been rated “AA+” by Fitch and has been assigned “AA+” long-term and “A-1+” short-term issue ratings by S&P.
The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. The NDB received ‘AA+’ long-term issuer credit ratings from S&P and Fitch and ‘AAA’ foreign currency long-term issuer rating from Japan Credit Rating Agency (JCR) and Analytical Credit Rating Agency (ACRA).